What was the goodwill impairment for the Corcoran Franchise Group in 2023?

According to Corcoran's 2025 Franchise Disclosure Document, during 2023, Corcoran had a goodwill impairment of $25 million at the Cartus reporting unit, and franchise trademarks were impaired by $25 million. This was a result of the company reorganizing its internal reporting structure, integrating the lead generation business within franchise services, which altered the composition of its reporting units within the Franchise Group. However, this reorganization did not change its operating or reportable segments.

The FDD states that impairment assessments are performed at the reporting unit level, which includes the Owned Brokerage Group, franchise services (within the Franchise Group segment), Title Group, and Cartus (also within the Franchise Group segment). These assessments compare the carrying value of each reporting unit and indefinite-lived intangible asset to their respective fair values. When the carrying value exceeds the fair value, the carrying value is reduced to fair value, and an impairment charge is recorded. These impairment charges are non-cash and are listed separately on the Consolidated Statements of Operations.

It's important to note that in 2024, there was no impairment of goodwill or other indefinite-lived intangible assets. However, management did evaluate the effect of lowering the estimated fair value by 10% and determined that, with the exception of the Cartus reporting unit, no impairment of goodwill would have been recognized under this evaluation for 2024. This indicates that the fair value of the Cartus reporting unit was close to its carrying value, making it more susceptible to impairment based on changes in market conditions or projected revenues. Trademarks at Franchise Group and Cartus have little to no excess fair value over carrying value, making them more vulnerable to impairment if projected revenues decline.