Pity about the NED, page-18

I'm not sure what the split is in good will value, and I'm willing to accept it as a concern. I will point out, however, that there are many companies for which their goodwill value makes up nearly 100% of their assets. Think advertising agencies or similar service-only companies with few "brick and mortar" assets.

A 100% franchise company would also have few hard assets, so those that its assets would be dominated by goodwill. CKF has over 60 franchisees. While it owns physical outlets, it also has income from franchises, so increasing the "goodwill to physical asset" ratio.

Of course goodwill is only valid while it remains "good", that's a given. Nothing remains forever - hence resource companies' huge writedowns on the price of their commodities (arguably, resources in the ground can be viewed, in the extreme, as goodwill. They are valueless unless someone wants them!)

Any analysis of the asset values is just that: your view on their worth. If you believe there is too much goodwill on the books, simple - don't invest. If, conversely, you believe goodwill is underestimated, then there is value to be found. Peeps like the Sage of Omaha certainly look at the latter.