What is the estimated useful life for franchise relationships for Benjamin Franklin Plumbing?
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 |
Source: Item 22 — CONTRACTS (FDD pages 87–88)
What This Means (2025 FDD)
According to Benjamin Franklin Plumbing's 2025 Franchise Disclosure Document, the estimated useful life for franchise relationships is 15 years. As of December 31, 2024, the gross amount associated with these relationships was $353,475, with accumulated amortization of $133,282 and impairment of $842, resulting in a net amount of $219,351. The weighted average remaining useful life was 9.4 years.
This means that Benjamin Franklin Plumbing amortizes the initial cost of establishing franchise relationships over a 15-year period for accounting purposes. The accumulated amortization reflects the amount of the initial investment that has already been recognized as an expense over time. The impairment represents a reduction in the asset's carrying value if its fair value falls below its book value.
The weighted average remaining useful life indicates the average time left before the existing franchise relationships are fully amortized. For a prospective franchisee, this information provides insight into how Benjamin Franklin Plumbing values and accounts for its franchise network. It also suggests the expected duration over which the franchisor anticipates benefiting from these relationships.
It's important to note that this is an accounting estimate and does not necessarily reflect the actual lifespan of a franchise agreement, which may be subject to renewal or termination as detailed in the franchise agreement.