What is the total goodwill associated with Legacy Success Group, LLC's reputation for Exit?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
| 2025 | $ | 84,065 |
|---|---|---|
| 2026 | 84,065 | |
| 2027 | 84,065 | |
| 2028 | 83,997 | |
| 2029 | 83,808 | |
| Thereafter | 309,814 | |
| Total estimated amortization expense | $ 729,814 |
Goodwill
In accordance with update 2014-02 to the FASB Accounting Standards Codification (ASC) 350, Intangibles – Goodwill and Other, the Company has elected to apply the accounting alternative for goodwill. The accounting alternative allows an entity to take goodwill relating to each business combination or reorganization event resulting in fresh-start reporting (amortizable unit of goodwill) and amortize it on a straight-line basis
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, the company recorded goodwill associated with the acquisition of Legacy Success Group, LLC, on January 1, 2018. During the year ended December 31, 2020, an additional $6,250 was assigned to goodwill in relation to the purchase agreement. The total goodwill associated with Legacy Success Group, LLC's reputation within its industry amounts to $24,973.
Exit began amortizing this goodwill over a ten-year period starting January 1, 2018. For the years ended December 31, 2024, 2023, and 2022, the amortization expense totaled $2,914 each year. Management determined that there was no impairment related to this goodwill for those years.
For a prospective Exit franchisee, this information indicates that Exit values the reputation and brand equity it acquires through acquisitions. The amortization of goodwill is a standard accounting practice that spreads the cost of the intangible asset (reputation) over its useful life. The fact that there was no impairment suggests that the value of the acquired goodwill has been maintained.