What was the accumulated amortization for software for Benjamin Franklin Plumbing as of December 31, 2024?
Benjamin_Franklin_Plumbing Franchise · 2025 FDDAnswer from 2025 FDD Document
ong-term assets consisted of the following as of December 31, 2024 and 2023:
| 2024 | 2023 | |
|---|---|---|
| Cost to obtain contracts - commissions | $ 12,104 | $ 10,729 |
| Prepaid customer incentive payments | 532 | 744 |
| Other | 129 | 467 |
| Total other long-term assets | $ 12,765 | $ 11,940 |
AB Assetco LLC and Subsidiaries Notes to Consolidated Financial Statements (in thousands of dollars)
Years Ended December 31, 2024, 2023 and 2022
8. Intangible Assets and Goodwill
Intangible Assets, Net
Intangible assets consisted of the following as of December 31, 2024 and 2023
| As of December 31, 2024 | ||||||||
|---|---|---|---|---|---|---|---|---|
| Accumulated Estimated Amortization | ||||||||
| Useful Life | Gross Amount | and Impairment | Net Amount | Remaining Useful Life | ||||
| Trademarks(1) | 15-25 years | $ | 178,010 | $ | 36,252 | $ | 141,758 | 20.1 |
| Franchise relationships | 15 years | 351,207 | 132,778 | 218,429 | 9.4 | |||
| Software(2) | 10 years | 7,500 | 6,356 | 1,144 | 0.3 | |||
| Proprietary processes | 10 years | 2,449 | 1,378 | 1,071 | 4.6 | |||
| Noncompetition agreements | 5 years | 701 | 583 | 118 | 1.6 | |||
| Intangible assets, net | $ | 539,867 | $ | 177,347 | $ | 362,520 |
- (1) Trademark impairment was $456.
- (2) Software impairment was $2,544.
| As of December 31, 2023 | ||||||||
|---|---|---|---|---|---|---|---|---|
| Estimated | Accumulated | Weighted Average Remaining | ||||||
| Useful Life | Gross Amount | Amortization | Net Amount | Useful Life | ||||
| Trademarks | 15-25 years | $ | 178,010 | $ | 28,685 | $ | 149,325 | 20.3 |
| Franchise relationships | 15 years | 351,207 | 109,364 | 241,843 | 10.3 | |||
| Software | 10 years | 7,500 | 3,500 | 4,000 | 5.3 | |||
| Proprietary processes | 10 years | 2,449 | 1,133 | 1,316 | 4.7 | |||
| Noncompetition agreements | 5 years | 701 | 472 | 229 |
Source: Item 22 — CONTRACTS (FDD pages 87–88)
What This Means (2025 FDD)
According to Benjamin Franklin Plumbing's 2025 Franchise Disclosure Document, as of December 31, 2024, the accumulated amortization for software was $3,812, with an additional impairment of $2,544, resulting in a net amount of $1,144. The software has an estimated useful life of 10 years, but a weighted average remaining useful life of only 0.3 years.
This means that Benjamin Franklin Plumbing has been depreciating its software assets over a 10-year period. The accumulated amortization represents the total amount of depreciation that has been recognized on the software up to December 31, 2024. The impairment charges suggest that the value of the software has declined, leading to a write-down of its carrying value. The impairment charges of $2,544 are related to Successware.
The relatively short remaining useful life of 0.3 years indicates that the software is nearing the end of its depreciable life or that its value has significantly diminished. This could be due to technological obsolescence, changes in business needs, or other factors. For a prospective franchisee, this information is relevant because it provides insight into the company's investment in and management of its software assets. It also highlights the potential need for future investments in new software systems as the existing ones become outdated.
It is important to note that the company recognized impairment losses totaling $17,775 during the year ended December 31, 2024, relating to its software system Successware. The company committed to a plan to sell the Successware software during 2024, with the sale expected to close during 2025. As of December 31, 2024, the software is classified as an asset held and used as the company continues to use the software until a replacement system is fully implemented. The company recognized an impairment loss totaling $14,775 and $3,000 on the consolidated statement of operations for the software classified under property and equipment and intangible assets.