How does Basecamp Fitness treat trademarks acquired in a business combination regarding amortization?

According to Basecamp Fitness's 2025 Franchise Disclosure Document, the company capitalizes fees for the development of trademarks, which are then amortized using the straight-line method over fifteen years. However, trademarks acquired through a business combination are treated differently.

Specifically, Basecamp Fitness considers these acquired trademarks to have indefinite lives. As a result, the company does not amortize these trademarks. Instead, they are tested annually for impairment. This means that rather than systematically writing down the value of the trademark over time, Basecamp Fitness assesses each year whether the value of the trademark has declined.

This approach can have implications for the financial statements of Basecamp Fitness and potentially for franchisees if it affects the overall financial health of the company. The company is required to test goodwill for impairment only when a triggering event occurs that indicates the fair value of the Company may be below its carrying amount. Factors that could trigger an impairment test include, but are not limited to, underperformance relative to historical or projected future operating results, significant change in the manner of use of the acquired assets, or the Company's overall business and significant negative industry or economic trends. No triggering events were identified in the years ended December 31, 2024, 2023 and 2022.