What was the acquisition of goodwill for Gold Star in 2023?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
epresent collateral for obligations of GSC Properties, LLC.
NOTE 22 – BUSINESS COMBINATIONS
On August 1, 2022, TCWW, LLC entered into an agreement to acquire certain assets and assume certain liabilities of Block Restaurant Group, LLC, a related party. The acquisition was made for the purpose of acquiring personnel, their existing locations, as well as additional skills and knowledge.
In accordance with U.S. GAAP, the purchase price of the acquired assets has been allocated based on the fair value of all identifiable assets at the date of acquisition. The paid amounts exceed the fair value of the identifiable assets by $89,300. Therefore, this amount is included in goodwill on the consolidated balance sheets of the Company as of December 31, 2022.
The assets acquired are as follows:
| Equipment and Fixtures | $_ | 45,700 |
|---|---|---|
| ------------------------ | ----- | -------- |
On August 1, 2023, Gold Star Chili, Inc. and GSC Properties, LLC entered into an agreement to acquire property in Hillsboro, Ohio, as well as certain assets of M.F. Daoud, Inc. The acquisition was made for the purpose of acquiring the existing location, as well as additional skills, intellectual property, and furniture, fixtures, and equipment.
In accordance with U.S.
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, on August 1, 2023, Gold Star Chili, Inc. and GSC Properties, LLC acquired property in Hillsboro, Ohio, and certain assets of M.F. Daoud, Inc. This acquisition included the existing location, skills, intellectual property, and furniture, fixtures, and equipment. As a result, $200,000 of goodwill was recorded on the company's consolidated balance sheets as of December 31, 2023. This goodwill is attributed to factors such as expected continued customer patronage, the brand's recognition, and long-term relationships.
Goodwill, in accounting terms, represents the intangible assets of a business, such as brand reputation and customer relationships, that are not separately identifiable but contribute to its overall value. For a prospective Gold Star franchisee, this means that part of the purchase price of the acquired assets was allocated to these intangible benefits expected to arise from the acquisition. The allocation was based on the fair value of all identifiable assets at the date of acquisition, in accordance with U.S. GAAP (Generally Accepted Accounting Principles).
The FDD also states that Gold Star adopted an accounting alternative for measuring goodwill, amortizing it on a straight-line basis over ten years and evaluating it for impairment only when a triggering event occurs. No such triggering event occurred during 2023, so no impairment loss was recorded. This amortization approach affects how Gold Star reports its financial performance over time.
For a potential franchisee, understanding goodwill and its accounting treatment is important for assessing the financial health and stability of Gold Star. It also highlights the value the company places on its brand and customer relationships, which are key factors in the success of a franchise system. The future amortization expense related to goodwill is expected to be $57,930 per year through December 2030, $49,930 for the year ending December 2031, $30,209 for the year ending December 2032, $16,667 for the year ending December 2033, and $5,000 for the year ending December 2034.