What is the estimated useful life for customer relationships for Batteries Plus Bulbs?
Batteries_Plus_Bulbs Franchise · 2025 FDDAnswer from 2025 FDD Document
ATED FINANCIAL STATEMENTS - CONTINUED**
December 31, 2024 and 2023 (Dollars in thousands, except per share amounts)
NOTE C - OTHER INTANGIBLE ASSETS, NET
The carrying amount and accumulated amortization of other intangible assets consists of the following as of December 31:
| Weighted Average Useful Lives Remaining | 2024 | 2023 | |
|---|---|---|---|
| Contract rights | 11.5 years | $ 123,848 | $ 123,848 |
| Trade name | Indefinite | 103,875 | 103,875 |
| Customer relationships | 10.5 years | 100,773 | 100,773 |
| Contractual relationships | 8.5 years | 58,200 | 58,200 |
| Gross carrying amount | 386,696 | 386,696 | |
| Accumulat |
Source: Item 21 — Financial Statements (FDD pages 79–80)
What This Means (2025 FDD)
According to Batteries Plus Bulbs's 2025 Franchise Disclosure Document, the estimated useful life for customer relationships is 10.5 years. This means that Batteries Plus Bulbs estimates the economic benefit derived from its customer relationships will last for this duration. This figure is relevant to the valuation of intangible assets on the company's balance sheet. As of 2024 and 2023, the gross carrying amount for customer relationships was valued at $100,773 (in thousands).
For a prospective franchisee, understanding the useful life of customer relationships can provide insight into the long-term value of the Batteries Plus Bulbs brand and its customer base. A longer useful life typically indicates stronger customer loyalty and repeat business, which can contribute to the stability and profitability of a franchise. This information, while primarily accounting-related, indirectly reflects the strength and durability of the Batteries Plus Bulbs business model.
It's important to note that this is an estimated figure and actual customer relationships may last longer or shorter depending on various factors such as market conditions, competition, and the franchisee's ability to maintain customer satisfaction. Additionally, the accumulated amortization for customer relationships was ($45,010) in 2024 and ($39,705) in 2023, reflecting the reduction in value of these relationships over time.
Franchisees should consider this information in conjunction with other factors, such as the initial investment, ongoing fees, and potential revenue, to assess the overall financial viability of a Batteries Plus Bulbs franchise. Further due diligence, including speaking with existing franchisees and conducting market research, is recommended to gain a comprehensive understanding of the business opportunity.