What was the total amount of expenses for Cornwell Quality Tools in 2023?
Cornwell_Quality_Tools Franchise · 2025 FDDAnswer from 2025 FDD Document
December 31, 2022, valuation from the Appraiser. The fair value as of December 31, 2023, is subject to change upon the final valuation from the Appraiser.
ESOP contribution expense was $5,700,000 in 2023 and $5,000,000 in 2022.
13. LITIGATION
The Company is the defendant in a class action lawsuit, in the state of California, related to employment labor laws. During 2023, a settlement agreement was reached, and the Company agreed to pay $5,500,000. The settlement agreement is still awaiting final approval from the California court system. The Company has accrued the settlement amount which is included in other income (expense) within the consolidated statement of operations at December 31, 2023. In addition, the Company is involved in other legal proceedings which arise in the ordinary course of business. Management, after consultation with the Company's legal counsel, believes that these matters will not have a material impact on the financial condition, results of operations, or cash flows of the Company.
14. CONTINGENCIES
The Company's past and present daily operations include activities which are subject to federal and state environmental regulations. Compliance with these regulations has not had, nor does the Company expect such compliance to have, a material effect upon net income, financial condition, or competitive position of the Company.
15. MAJOR SUPPLIERS
Purchases from the Company's two largest suppliers accounted for approximately 30% and 31% of purchases during 2023 and 2022, respectively. Any disruptions in the supply chain from these suppliers could be substituted with purchases of similar products from other suppliers.
Source: Item 23 — RECEIPT (FDD pages 101–373)
What This Means (2025 FDD)
According to Cornwell Quality Tools' 2025 Franchise Disclosure Document, specific expense details are provided for certain categories. In 2023, the ESOP (Employee Stock Ownership Plan) contribution expense was $5,700,000. Additionally, Cornwell Quality Tools reached a settlement agreement in a class action lawsuit and accrued $5,500,000 for this settlement, which is included in other income (expense) within the consolidated statement of operations.
Furthermore, the FDD mentions that Cornwell Quality Tools recognized $8,483,752 of goodwill related to the acquisition of CQT Kennedy, LLC. The amortization expense for this goodwill was $848,375 in 2023. The document also notes that purchases from the company's two largest suppliers accounted for approximately 30% of purchases during 2023.
However, the FDD does not provide a single, aggregated figure for the total expenses of Cornwell Quality Tools in 2023. To obtain a comprehensive understanding of all expenses, a prospective franchisee should review the complete audited financial statements included in the FDD and consult with Cornwell Quality Tools' management for clarification.