After December 31, 2023, how will Zoomin Groomin account for vehicles, and why?
Zoomin_Groomin Franchise · 2025 FDDAnswer from 2025 FDD Document
Inventory is valued at cost when purchased and is accounted for using the specific identification method of valuation. The inventory consists of vehicles and trailers held for future resale to franchises. The Company will recognize future income from the sales as ordinary other income on the date the title is transferred. Subsequent to the year ended December 31, 2023, the Company will no longer hold title to the vehicles and thus, the vehicles will not be recorded as inventory of the Company in subsequent years. As of December 31, 2024, all inventory has been sold.
Source: Item 9 — 01. Financial Statements and Exhibits. (FDD pages 68–156)
What This Means (2025 FDD)
According to Zoomin Groomin's 2025 Franchise Disclosure Document, the company will no longer hold title to the vehicles after December 31, 2023. As a result, the vehicles will not be recorded as inventory in subsequent years. By December 31, 2024, all inventory had been sold.
This change in accounting practice means that Zoomin Groomin franchisees will likely be responsible for acquiring their own vehicles, rather than purchasing them directly from the company. This could impact the initial investment required to start the franchise, as franchisees will need to secure financing or use their own capital to buy or lease a suitable vehicle.
Prospective franchisees should inquire about the specifications and requirements for the vehicles, as well as any approved vendors or financing options that Zoomin Groomin may have in place. Understanding these details is crucial for budgeting and planning the launch of their mobile pet grooming business.