When did B Bops cease amortization of the licensed system?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
The licensed system was initially being amortized over 15 years. In accordance with the authoritative guidance for intangible assets with indefinite lives issued in June 2001, amortization of the licensed system ceased as of June 30, 2002, and the Company evaluates the licensed system on an annual basis for potential impairment. There was no impairment for the year ended December 31, 2024.
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 52–53)
What This Means (2025 FDD)
According to B Bops's 2025 Franchise Disclosure Document, the company stopped amortizing its licensed system as of June 30, 2002. Initially, the licensed system was being amortized over a period of 15 years. This change was made in accordance with authoritative guidance for intangible assets with indefinite lives, which was issued in June 2001.
Following this change, B Bops evaluates the licensed system annually to check for potential impairment. The FDD states that there was no impairment for the year ended December 31, 2024. This evaluation is a standard accounting practice to ensure that the value of the intangible asset is accurately reflected on the company's financial statements.
For a prospective franchisee, this means that the value of the licensed system is considered an indefinite asset and is not being reduced over time through amortization. Instead, B Bops assesses its value annually. This accounting treatment can affect the company's reported financial performance and may be relevant to a franchisee's understanding of the financial health and stability of the franchisor.