What was the 'leodwill' amount for Fast Fix Jewelry And Watch Repairs in 2024?
Fast_Fix_Jewelry_And_Watch_Repairs Franchise · 2025 FDDAnswer from 2025 FDD Document
| Goodwill, net at January 1, 2022 | $ 3,832,273 |
|---|---|
| Amortization of goodwill | (617,280) |
| Goodwill, net at December 31, 2022 | 3,214,993 |
| Amortization of goodwill | (617,280) |
| Goodwill, net at December 31, 2023 | $ 2,597,713 |
Goodwill totaled approximately $6,173,000 and accumulated amortization totaled approximately $2,958,000 and $3,575,000 at December
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 37)
What This Means (2025 FDD)
According to Fast Fix Jewelry And Watch Repairs' 2025 Franchise Disclosure Document, the goodwill totaled approximately $6,173,000 as of December 31, 2023. The accumulated amortization totaled approximately $2,958,000 and $3,575,000 at December 31, 2023 and December 31, 2022, respectively. The FDD states that the goodwill amortization expense is estimated to be approximately $617,300 during each of the years 2024 through 2027 and $128,500 in 2028.
For a prospective Fast Fix Jewelry And Watch Repairs franchisee, this indicates the amount of expense that the company anticipates allocating to goodwill amortization each year. Goodwill is an intangible asset that arises when a company acquires another company for a price higher than the net asset value. It represents the value of the acquired company's brand name, customer relationships, intellectual property, and any other factors that allow it to generate more revenue. Amortization is the systematic reduction of the carrying value of an intangible asset, such as goodwill, over its useful life.
The estimated amortization expense of $617,300 per year from 2024 to 2027 suggests that Fast Fix Jewelry And Watch Repairs expects to recognize a significant portion of the goodwill value over these years. This could impact the company's reported profits, as amortization expense reduces net income. The amortization expense of $128,500 in 2028 indicates a smaller remaining balance of goodwill to be amortized in that year.
It is important to note that goodwill is not always amortized. Under current accounting standards, goodwill is typically tested for impairment at least annually, and if impaired, the carrying value is written down. The fact that Fast Fix Jewelry And Watch Repairs is amortizing goodwill suggests that the company is following a specific accounting policy to systematically reduce its value over time. A prospective franchisee should consult with a financial advisor to understand the implications of goodwill amortization on the company's financial statements.