What is the estimated useful life of the trademarks intangible asset for 360 Painting?
360_Painting Franchise · 2025 FDDAnswer from 2025 FDD Document
lated to property and equipment recognized in the consolidated statement of operations was $334,358 and $348,175 for the years ended December 2024 and 2023, respectively.
6. Intangible Assets and Goodwill
Intangible Assets
Intangible assets consisted of the following as of December 31, 2024 and 2023:
| 2024 | ||||||||
|---|---|---|---|---|---|---|---|---|
| Estimated Useful Life | Gross Amount | Accumulated Amortization | Net Amount | Weighted Average Remaining Useful Life | ||||
| Franchise relationships Trademarks Intangible assets | 10 years 15 years | $ $ | 13,763,800 1,656,200 15,420,000 2023 | $ $ | 3,650,279 336,616 3,986,895 | $ $ | 10,113,521 1,319,584 11,433,105 | 7.3 11.4 |
| Estimated Useful Lif |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 56)
What This Means (2025 FDD)
According to the 2025 FDD, 360 Painting estimates the useful life of its trademarks intangible assets to be 15 years. This means that 360 Painting amortizes the cost of its trademarks over a 15-year period for accounting purposes.
For a prospective franchisee, this information is relevant in understanding how 360 Painting values and accounts for its intangible assets. It also provides insight into the long-term importance and durability that 360 Painting places on its brand and trademarks. The trademarks are a crucial part of the 360 Painting system, as franchisees are required to use them on all materials representing their business, including business cards, apparel, and signage.
It's important to note that while the estimated useful life is 15 years, 360 Painting reviews its long-lived assets, including trademarks, for impairment at least annually. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge may be recognized. This could potentially shorten the actual useful life of the trademarks for accounting purposes if their value is deemed to have declined significantly.
Understanding the estimated useful life and impairment considerations can help a franchisee assess the financial stability and brand strength of 360 Painting. It also highlights the importance of maintaining brand standards and protecting the trademarks to preserve their value over time.