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What is the estimated useful life of the trademarks held by Benjamin Franklin Plumbing?

Benjamin_Franklin_Plumbing Franchise · 2025 FDD

Answer 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 of their trademarks is between 15 to 25 years. As of December 31, 2024, the gross amount allocated to trademarks was $179,232, with accumulated amortization of $35,973 and impairment of $954, resulting in a net amount of $142,305. The weighted average remaining useful life for these trademarks was 20.1 years.

For a prospective Benjamin Franklin Plumbing franchisee, this indicates the period over which the franchisor expects to derive economic benefit from its trademarks. Amortization is the systematic allocation of the cost of an intangible asset over its useful life, reflecting the decline in value of the trademark over time. Impairment represents a permanent reduction in the asset's value, suggesting unforeseen circumstances that negatively affected the trademark's worth.

The fact that the weighted average remaining useful life is 20.1 years suggests that, on average, the trademarks have been in use for a relatively short period, implying that they still have a significant period of economic benefit remaining. This can be a positive sign for franchisees, as it indicates that the brand's trademarks are expected to maintain their value and relevance for a considerable time. The trademarks contribute to brand recognition and customer loyalty, which are crucial for the success of a Benjamin Franklin Plumbing franchise.

It is important for a potential franchisee to understand how the franchisor values and manages its intangible assets, as these assets are critical to the brand's overall strength and market position. The estimated useful life and the net amount of the trademarks provide insight into the long-term value and sustainability of the Benjamin Franklin Plumbing brand. Reviewing these figures in conjunction with other financial data in the FDD can help a franchisee assess the overall financial health and stability of the franchise system.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.