What was the impairment of goodwill for Clear Pest Pros for the year ended December 31, 2023?
Clear_Pest_Pros Franchise · 2025 FDDAnswer from 2025 FDD Document
84,979 | $ 130,969 |
Consolidated Statements of Operations (dollars in thousands)
| Year ended December 31, | 2024 | 2023 | 2022 (as restated) |
|---|---|---|---|
| Net Revenue | $ 29,538 | $ 31,072 | $ 33,483 |
| Cost of Revenue | 10,816 | 9,613 | 9,055 |
| Gross Profit | 18,722 | 21,459 | 24,428 |
| Operating Expenses, | 19,569 | 20,604 | 27,789 |
| before impairment | |||
| Impairment of Goodwill | 10,519 | 45,537 | 1,266 |
| Impairment of Intangible Assets | - | - | 4,952 |
| Operating Loss | (11,366) | (44,682) | (9,579) |
| Non-Operating Income Interest income Other income | 336 404 | 496 386 | 1,112 268 |
| Total Non-Operating Income | 740 | 882 | 1,380 |
| Loss, before income taxes | (10,626) | (43,800) | (8,199) |
| Income Tax Expense (Recovery) | 482 | 477 | (1,86 |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 67)
What This Means (2025 FDD)
According to Clear Pest Pros' 2025 Franchise Disclosure Document, the impairment of goodwill for the year ended December 31, 2023, was $45,537. This figure reflects a significant expense recognized by Clear Pest Pros due to the reduced value of its goodwill during that period. Goodwill typically represents the intangible assets acquired in a business combination, such as brand reputation or customer relationships.
An impairment of goodwill indicates that the fair value of a reporting unit has fallen below its carrying amount, requiring the company to write down the value of goodwill on its balance sheet. For Clear Pest Pros, this substantial impairment suggests potential challenges or changes in the business environment that negatively impacted the perceived value of the company's intangible assets during 2023.
Prospective franchisees should take note of this significant impairment. It is essential to inquire with Clear Pest Pros about the specific factors that led to this impairment and what measures the company is taking to address the underlying issues. Understanding the reasons behind the goodwill impairment can provide valuable insights into the financial health and stability of the franchise system.