How are Bath Tune Up's lease asset carrying amounts assessed?

According to Bath Tune Up's 2025 Franchise Disclosure Document, the company assesses lease asset carrying amounts for impairment when events or circumstances indicate that the carrying amount may not be recoverable. Bath Tune Up monitors for events or changes in circumstances that require reassessment of lease classification. When a reassessment results in the re-measurement of a lease liability, a corresponding adjustment is made to the carrying amount of the lease asset.

For a Bath Tune Up franchisee, this means that the value of the assets associated with their leased locations (likely office or storage space) is regularly reviewed. If there are indications that the value of these assets has declined, Bath Tune Up will take steps to account for this decline, which could affect the franchisee's financial statements. Events that could trigger such a review might include a significant downturn in business, damage to the property, or changes in market conditions.

This policy ensures that Bath Tune Up's financial statements accurately reflect the value of its assets. It also means that franchisees need to be aware of factors that could impact the value of their leased assets and to communicate any relevant information to Bath Tune Up. This process aligns with standard accounting practices, ensuring that assets are not overstated on the balance sheet and providing a more realistic view of the company's financial health.