What was the net goodwill for The Standardx's management and franchising segment at December 31, 2024?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
| (1) | Overhead | Unallocated (2) | Total | |||
|---|---|---|---|---|---|---|
| Balance at January 1, 2023 | ||||||
| Goodwill | $ 1,465 | $ 210 | $ 1,589 | $ 2 | $ — | $ 3,266 |
| Accumulated impairment losses | (4) | (161) | — | — | — | (165) |
| Goodwill, net | $ 1,461 | $ 49 | $ 1,589 | $ 2 | $ — | $ 3,101 |
| Activity during the year | ||||||
| Additions | 62 | — | 39 | — | — | 101 |
| Foreign currency translation | 3 | — | — | — | — | 3 |
| adjustments | ||||||
| Balance at December 31, 2023 | ||||||
| Goodwill | 1,530 | 210 | 1,628 | 2 | — | 3,370 |
| Accumulated impairment losses | (4) | (161) | — | — | — | (165) |
| Goodwill, net | $ 1,526 | $ 49 | $ 1,628 | $ 2 | $ — | $ 3,205 |
| Activity during the year | ||||||
| Additions | 86 | — | — | — | 336 | 422 |
| Disposals | — | — | (914) | — | — | (914) |
| Impairment losses | (110) | (15) | (38) | — | — | (163) |
| Measurement period adjustments | — | — | (1) | — | — | (1) |
| (Note 7) | ||||||
| Foreign currency translation | (7) | — | — | — | (1) | (8) |
| adjustments | ||||||
| Balance at December 31, 2024 | ||||||
| Goodwill | 1,609 | 210 | 713 | 2 | 335 | 2,869 |
| Accumulated impairment losses | (114) | (176) | (38) | — | — | (328) |
| Goodwill, net | $ 1,495 | $ 34 | $ 675 | $ 2 | $ 335 | $ 2,541 |
(1) At December 31, 2023, one of our
Source: Item 23 — Receipts (FDD pages 85–132)
What This Means (2025 FDD)
According to The Standardx's 2025 Franchise Disclosure Document, the net goodwill for the management and franchising segment as of December 31, 2024, was $1,495 million. Goodwill represents the intangible assets acquired in a business combination that are not separately identifiable, such as brand reputation and customer relationships. It is an accounting measure reflecting the value of the acquired business beyond its tangible assets and specific identifiable intangibles.
The goodwill is primarily tax deductible and recorded on the management and franchising segment. It is attributable to the growth opportunities The Standardx expects to realize by enhancing its lifestyle portfolio and offering immersive brand experiences. This indicates that The Standardx believes its brand and service offerings will drive future growth and profitability in the management and franchising segment.
Potential franchisees should understand that goodwill is subject to impairment reviews. If the fair value of the reporting unit falls below its carrying value, an impairment charge is recognized, which can negatively impact The Standardx's financial results. The FDD notes that changes in projected business performance expectations or specific valuation factors outside of The Standardx's control, such as the discount rate, may significantly impact the estimated fair value of the reporting unit within the management and franchising segment. A 5% decline in the underlying cash flows or a 1% increase in the discount rate or capitalization rate would result in a material impairment charge.