What factors contributed to the goodwill impairment loss recognized by Cool Binz in 2023?
Cool_Binz Franchise · 2025 FDDAnswer from 2025 FDD Document
consolidated statement of operations. The impairment loss is attributable in part to deteriorating economic conditions impacting the Company and elimination of the TruckMount manufacturing; furthermore, strategic shifts undertaken by management to improve the overall health of the business, including ongoing efforts to reduce the overall size of its franchise network in order to resolve a host of franchisee-related matters of noncompliance, adversely impacted expected future cash inflows as well.
During 2023, management determined that the carrying amount of the Company exceeded fair value, which was estimated based on the present value of expected future cash inflows. Accordingly, a goodwill impairment loss of $45,537 was recognized in 2023, which is included within operating expenses on the consolidated statement of operations. The impairment loss is attributable in part to deteriorating economic conditions impacting the Company, including rising interest rates and the
Source: Item 23 — RECEIPTS (FDD pages 63–238)
What This Means (2025 FDD)
According to Cool Binz's 2025 Franchise Disclosure Document, a goodwill impairment loss of $45,537 was recognized in 2023. This loss was due to several factors that negatively impacted the company's fair value.
Deteriorating economic conditions played a significant role, including rising interest rates and the increasing cost of debt. These factors made it more expensive for Cool Binz to invest in its business and operations. Additionally, strategic shifts made by management to improve the overall health of the business also contributed to the impairment loss.
Specifically, Cool Binz's efforts to reduce the size of its franchise network to address franchisee-related matters of noncompliance adversely affected expected future cash inflows. This suggests that issues with franchisees and the steps taken to resolve them had a negative financial impact on the company, leading to the recognition of the goodwill impairment loss.