What is the goodwill, net value for TCWW, LLC?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
goods sold on the consolidated statements of income and comprehensive income.
Reclassifications
Certain amounts in the prior year consolidated financial statements have been reclassified for comparative purposes to conform with the presentation in current year consolidated financial statements.
NOTE 2 - CASH AND CASH FLOWS
At various times throughout the year, the Company may have cash in certain financial institutions in excess of insured limits. The Federal Deposit Insurance Corporation (FDIC) insures account balances in all accounts up to $250,000 for each business depositor.
For purposes of the consolidated statements of cash flows, cash includes cash on hand and cash in a checking account.
Cash paid for interest in 2024, 2023, and 2022 was $798,109, $785,517, and $515,799, respectively.
The Company had noncash financing and investing transactions as follows:
| Chili, Inc. | LLC | TCWW, LLC | Eliminations | Total | ||
|---|---|---|---|---|---|---|
| Current Assets | ||||||
| Cash | $ 437,267 | $ 909,375 | $ 244,320 | $ | - $ 1,590,962 | |
| Accounts Receivable, Less Allowance for | ||||||
| Expected Credit Losses of $896,732 | 905,238 | 2,002,485 | 4,130 | (1,981,263) | 930,590 | |
| Advance - Related Party | 3,441,832 | - | - | (3,441,832) | - | |
| Other Receivables | 21,704 | - | 1,502 | - | 23,206 | |
| Inventory | 980,151 | - | 27,923 | - | 1,008,074 | |
| Prepaid Expenses | 166,348 | 109,041 | 15,154 | (12,824) | 277,719 | |
| Total Current Assets | 5,952,540 | 3,020,901 | 293,029 | (5,435,919) | 3,830,551 | |
| Property and Equipment | ||||||
| Land | - | 7,004,518 | - | (164,029) | 6,840,489 | |
| Buildings | 4,127,417 | 10,257,116 | - | 817,551 | 15,202,084 | |
| Leasehold Improvements | 5,500,864 | - | 429,641 | - | 5,930,505 | |
| Furniture and Equipment | 5,913,212 | 184,794 | 535,932 | - | 6,633,938 | |
| Vehicles | 100,623 | - | - | - | 100,623 | |
| Construction in Progress | 489,000 | - | - | - | 489,000 | |
| 16,131,116 | 17,446,428 | 965,573 | 653,522 | 35,196,639 | ||
| Less Accumulated Depreciation | 9,164,879 | 6,837,663 | 291,152 | 727,229 | 17,020,923 | |
| Total Prope |
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, the net goodwill for TCWW, LLC is $67,719. This figure represents the value of intangible assets like brand reputation and customer relationships that TCWW, LLC possesses after accounting for accumulated amortization. Goodwill is an important asset, especially after Gold Star's acquisition of Block Restaurant Group, LLC in 2022, where the purchase price exceeded the fair value of identifiable assets by $89,300, contributing to the initial goodwill.
For a prospective Gold Star franchisee, understanding the goodwill associated with different entities within the Gold Star system is crucial. Goodwill can influence the overall valuation of the business and its potential for future earnings. The FDD states that Gold Star amortizes goodwill on a straight-line basis over ten years and evaluates it for impairment only when a triggering event occurs, which hadn't happened as of the reviewed financial years. This amortization approach affects how goodwill is reported on the balance sheets.
The goodwill is reported net of accumulated amortization. As of December 31, 2024, 2023, and 2022, the accumulated amortization was $129,914, $74,727, and $27,721, respectively. Future amortization expenses are projected to be $57,930 per year through December 2030, with varying amounts in subsequent years. This amortization schedule provides insight into how the goodwill value will decrease over time, impacting the company's financial statements.
It's important for franchisees to monitor any triggering events that could lead to impairment testing, as this could result in a write-down of the goodwill. The FDD also mentions that the trademark associated with the purchase of TCWW, LLC in 2017 was capitalized and is measured for impairment annually. While no adjustments were deemed necessary during the reviewed periods, franchisees should stay informed about these intangible assets and their potential impact on the financial health of their investment.