What was the total value of goodwill for Precision Door Service as of December 31, 2024?
Precision_Door_Service Franchise · 2025 FDDAnswer from 2025 FDD Document
audit findings, and certain internal control-related matters that we identified during the audit.
Dallas, Texas March 31, 2025
Combined Balance Sheets ($000's)
| As of December 31, | 2024 | 2023 |
|---|---|---|
| Assets | ||
| Current assets Cash Restricted Cash Trade accounts receivable - net Trade notes receivable, current portion – net Inventories Prepaid selling expenses, current Other current assets | $ 2,499 4,037 24,255 7,445 1,783 7,940 3,321 | $ 3,171 1,566 23,826 9,530 989 6,935 2,597 |
| Total current assets | 51,280 | 48,614 |
| Property and equipment – net Prepaid selling expenses, less current portion Trade notes receivable, less current portion - net Intangible assets - net Goodwill | 16,721 51,495 13,332 1,251,674 1,731,288 | 18,779 42,479 15,221 1,341,184 1,732,653 |
| Total assets | $ 3,115,790 | $ 3,198,930 |
| Liabilities and Member's | ||
| Equity | ||
| Current liabilities Accrued liabilities Deferred revenue, current | $ 2,998 14,745 | $ 3,908 13,631 |
| Total current liabilities | 17,743 | 17,539 |
| Deferred Revenue, less current portion | 70,787 | 70,176 |
| Contingencies (Note 9) | ||
| Member's Equity Additional paid-in equity Accumulated earnings Accumulated other comprehensive income/(loss) | $ 2,531, |
Source: Item 21 — Financial Statements (FDD page 91)
What This Means (2025 FDD)
According to Precision Door Service's 2025 Franchise Disclosure Document, the goodwill balance as of December 31, 2024, was valued at $1,731,288. Goodwill, in this context, represents the excess of the purchase price over the fair value of identifiable net assets acquired by Precision Door Service. This figure is an important indicator of the company's financial health and acquisition strategy.
Precision Door Service assesses its goodwill annually for impairment, typically around October 1st, or more frequently if circumstances suggest a potential decline in value. These tests are crucial because if the fair value of a reporting unit falls below its carrying amount, Precision Door Service must record an impairment loss, reducing the goodwill balance. The FDD notes that a qualitative assessment was performed as of October 1, 2024, which indicated potential impairment. However, a subsequent quantitative assessment, considering factors like a slightly decreased weighted average cost of capital and projected positive operating performance, showed that the fair value exceeded the carrying value, resulting in no impairment recorded for 2024.
For a prospective franchisee, the goodwill balance can provide insight into Precision Door Service's acquisition history and the value it places on its acquired assets. A high goodwill balance suggests that Precision Door Service has made significant investments in acquiring other businesses, while the absence of impairment charges in 2024 indicates that these investments are currently performing as expected. It is important to note that goodwill is an intangible asset and its value is based on management's estimates and assumptions, which can be subject to change. Therefore, a franchisee should consider this figure in conjunction with other financial metrics and qualitative factors when evaluating the franchise opportunity.