When does the Company perform its annual impairment review of the Bojangles brand?
Bojangles Franchise · 2025 FDDAnswer from 2025 FDD Document
The Company performs its annual impairment review of the Brand at December 1, first using the qualitative assessment then quantitative assessment if impairment is determined to be more likely than not. A quantitative assessment is performed by comparing the carrying value of the Brand to the estimated fair value of the Brand. An impairment occurs if the carrying amount of the Brand exceeds the estimated fair value. No qualitative impairment indicators were identified for the Brand in the Company's 2024, 2023 or 2022 assessments.
Source: Item 22 — CONTRACTS (FDD page 82)
What This Means (2025 FDD)
According to Bojangles's 2025 Franchise Disclosure Document, the company conducts its annual impairment review of the Bojangles brand on December 1. This review begins with a qualitative assessment, and if impairment is deemed likely, a quantitative assessment follows. The quantitative assessment involves comparing the carrying value of the brand to its estimated fair value. An impairment is recognized if the carrying amount exceeds the estimated fair value.
For a prospective franchisee, this means that Bojangles regularly evaluates the value of its brand. This process is essential for maintaining accurate financial records and ensuring that the brand's value is not overstated. The FDD notes that no qualitative impairment indicators were identified in the 2022, 2023, and 2024 assessments, suggesting brand stability during those years.
This type of impairment review is a standard accounting practice, as outlined by ASC 350, Intangibles – Goodwill and Other. It is designed to ensure that intangible assets like brand names are accurately valued on a company's balance sheet. Franchisees benefit from a healthy brand because it supports customer loyalty and attracts new business. Therefore, the annual review is a good indicator of the brand's ongoing financial health.