In which states does Ben Jerrys own franchise territory rights considered intangible assets?
Ben_Jerrys Franchise · 2025 FDDAnswer from 2025 FDD Document
cember 31:
| | Lives/Lease Term | 2023 | 2022 | |---|---|---|---| | Building leasehold improvements | 3-10 years | $ 937 | $ 937 | | Equipment and furniture | 3-14 years | 774 1,711 | 772 1,709 | | Less accumulated depreciation and | | 1,165 $ 546 | 1,021 $ 688 | | amortization | | | | Depreciation expense for the years ended December 31, 2024 and 2023 was approximately $155 and $144, respectively.
(4) Intangible Assets
Intangible assets represent franchise territory rights owned by the Company in the states of California and North Carolina. These territory rights are considered to have indefinite-lives and are included in intangible assets on the consolidated balance sheets.
The territory rights are indefinite by nature, and as such there are no costs incurred by the Company to renew or extend the terms.
The Company performs the annual test for impairment of these indefinite-lived intangible assets as of December 31. The impairment test for indefinite-lived intangible assets involves comparing the fair value of
Notes to Consolidated Financial Statements
December 31, 2024 and 2023
(Dollars in Thousands)
such assets with their carrying value, with any excess of carrying value over fair value recorded as an impairment charge. To determine fair value for indefinite-lived intangible assets, the Company uses the discounted cash flows that the asset or asset group can be expected to generate in the future. This valuation method requires management to project revenues, expenses, and cash flows over a multi-year period, as well as determine the weighted average cost of capital to be used as a discount rate. Significant management judgment is involved in preparing these estimates. Changes in projections or estimates could significantly change the estimated fair value of the indefinite-lived intangible assets. In addition, if management uses different assu
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 89–133)
What This Means (2025 FDD)
According to Ben Jerrys's 2025 Franchise Disclosure Document, the company owns franchise territory rights considered intangible assets in California and North Carolina. These rights are classified as having indefinite lives and are recorded as intangible assets on the company's consolidated balance sheets. As of December 31, 2024, and 2023, the carrying value of these intangible assets was $705,000.
The indefinite nature of these territory rights means that Ben Jerrys does not incur costs to renew or extend their terms. The company conducts an annual impairment test on these assets as of December 31 to ensure their fair value is not less than their carrying value. This test involves comparing the fair value of the assets with their carrying value, and any excess of carrying value over fair value is recorded as an impairment charge.
Determining the fair value of these intangible assets requires Ben Jerrys to estimate future revenues, expenses, and cash flows over a multi-year period, as well as to determine the weighted average cost of capital to be used as a discount rate. These estimates involve significant management judgment, and changes in projections or estimates could significantly impact the estimated fair value of the intangible assets. If management uses different assumptions or estimates in the future, or if conditions change, the operating results and balances of indefinite-lived intangible assets could be affected by impairment charges. For the years ended December 31, 2024 and 2023, there was no impairment of intangible assets.