How does Benjamin Franklin Plumbing evaluate and measure impairment of right-of-use assets?

According to the 2025 Benjamin Franklin Plumbing FDD, the company evaluates whether events and circumstances have occurred that indicate right-of-use assets have been impaired. The measurement of any impairment of such assets is based on their fair values. Once a right-of-use asset for an operating lease is impaired, the carrying amount of the right-of-use asset is reduced through expense, and the remaining balance is subsequently amortized on a straight-line basis.

For a Benjamin Franklin Plumbing franchisee, this means that if the value of an asset they are leasing decreases, the company will assess the impairment based on the asset's fair value. If impairment is indicated, the value of the asset on the franchisee's balance sheet will be reduced, and this reduction will be recognized as an expense. The remaining balance of the asset will then be amortized over its useful life using the straight-line method.

This accounting treatment ensures that the franchisee's financial statements accurately reflect the value of their assets. It also aligns with standard accounting practices for dealing with asset impairment. Franchisees should be aware of the factors that could lead to impairment, such as changes in market conditions or the physical condition of the asset, and understand how these factors could impact their financial performance.