What was 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 overall cost of accessible debt necessary to fuel investment; 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. The remaining goodwill was determined not to be impaired, as the carrying value of the remaining company exceeded the fair value.
Source: Item 23 — RECEIPTS (FDD pages 63–238)
What This Means (2025 FDD)
According to Cool Binz's 2025 Franchise Disclosure Document, the company recognized a goodwill impairment loss of $45,537 in 2023. This loss is included within operating expenses on the consolidated statement of operations.
The impairment loss was attributed to several factors. These include deteriorating economic conditions that impacted Cool Binz, such as rising interest rates and the increasing cost of debt required for investment. Additionally, strategic shifts made by management to improve the business's overall health, including efforts to reduce the size of its franchise network to address franchisee noncompliance, negatively affected expected future cash inflows.
The FDD also provides a table that shows the cash flows from operating activities for the years 2022, 2023, and 2024. In 2023, the impairment of goodwill was $45,537, while in 2022 it was $1,266 and in 2024 it was $10,519. This indicates that the goodwill impairment loss was most significant in 2023 compared to the other two years presented.