What valuation techniques might Augusta Lawn Care use for Level 3 financial instruments?

According to Augusta Lawn Care's 2025 Franchise Disclosure Document, the company uses specific valuation techniques for financial instruments, categorized into a three-level hierarchy based on the observability of inputs. Level 3 financial instruments, which have the lowest priority, rely on unobservable inputs for valuation.

For Level 3 measurements, Augusta Lawn Care may use pricing models, discounted cash flows, or similar techniques. The critical factor is that at least one significant model assumption or input is unobservable, meaning it's based on the company's own assumptions rather than market data. This approach is used when fair values cannot be readily determined from active markets or observable inputs.

The FDD states that as of December 31, 2024, December 31, 2023, and December 31, 2022, the carrying amounts of Augusta Lawn Care's financial assets and liabilities reported in the balance sheets approximate their fair value. This suggests that the company believes its valuation methods, including those for Level 3 instruments, provide a reasonable estimate of fair value. Prospective franchisees should be aware of these valuation methods, especially if they plan to invest in or acquire financial interests related to Augusta Lawn Care.