What is the estimated useful life of the ASP goodwill asset for Benjamin Franklin Plumbing?
Benjamin_Franklin_Plumbing Franchise · 2025 FDDAnswer from 2025 FDD Document
| As of December 31, 2024 | Net Amount | Weighted Average Remaining Useful Life | ||||||
|---|---|---|---|---|---|---|---|---|
| Estimated Useful Life | Gross Amount | Accumulated Amortization and Impairment | ||||||
| Authority Brands | 10 years | $ | 154,146 | $ | 30,829 | $ | 123,317 | 8 years |
| ASP | 10 years | 16,285 | 3,257 | 13,028 | 8 years | |||
| Mosquito Squad | 10 years | 12,422 | 2,484 | 9,938 | 8 years | |||
| Clockwork | 10 years | 126,296 | 25,259 | 101,037 | 8 years | |||
| Monster(1) | 10 years | 17,378 | 3,476 | 13,902 | 8 years | |||
| DoodyCalls | 10 years | 7,761 | 1,552 | 6,209 | 8 years | |||
| DRYmedic | 10 years | 25,963 | 5,193 | 20,770 | 8 years | |||
| Junkluggers | 10 years | 49,394 | 9,879 | 39,515 | 8 years | |||
| Weed Pro | 10 years | 19,941 | 3,490 | 16,451 | 8.25 years | |||
| Screenmobile | 10 years | 10,746 | 2,060 | 8,686 | 8.08 years | |||
| Other acquisitions(2) | 10 years | 7,995 | 3,643 | 4,352 | 8 years | |||
| Goodwill, net | $ | 448,327 | $ | 91,122 | $ | 357,205 |
Source: Item 22 — CONTRACTS (FDD pages 87–88)
What This Means (2025 FDD)
According to the 2025 Benjamin Franklin Plumbing FDD, the estimated useful life of the ASP goodwill asset is 10 years. As of December 31, 2024, the gross amount of the ASP goodwill was $16,285, with accumulated amortization and impairment of $3,257, resulting in a net amount of $13,028. The weighted average remaining useful life for the ASP goodwill was 8 years.
For a prospective Benjamin Franklin Plumbing franchisee, this means that the goodwill associated with the ASP acquisition is being amortized over a 10-year period. Amortization is the process of gradually writing off the initial cost of an asset. The fact that the weighted average remaining useful life is 8 years indicates that the ASP goodwill has already been amortized for 2 years as of the end of 2024.
Goodwill, in general, represents the intangible assets acquired in a business combination that are not separately identifiable, such as brand reputation or customer relationships. The company amortizes goodwill on a straight-line basis, meaning the same amount is expensed each year until the asset is fully amortized. This accounting treatment can affect the reported profitability of Benjamin Franklin Plumbing, as the amortization expense reduces net income.
It's important to note that the company also tests goodwill for impairment at the entity level. If the carrying amount of the goodwill exceeds its fair value, an impairment charge is recognized, which would further reduce the net amount of the goodwill asset. This could occur if the expected future cash flows from the ASP business are lower than initially anticipated.