For Bojangles, what level of inputs are fair value measurements based on for property, plant, and equipment?

According to Bojangles's 2025 Franchise Disclosure Document, the fair value measurements for property, plant, and equipment are based on Level 3 inputs. This means that Bojangles uses unobservable inputs to measure the fair value of these assets, relying on data that is not readily available from the market.

Level 3 inputs include appraisals or sales prices of comparable assets and estimates of future cash flows. This suggests that Bojangles assesses the value of its property, plant, and equipment by considering what similar assets have sold for and by projecting the future income these assets are expected to generate. These measurements are done on a nonrecurring basis and are subject to adjustments only when there is evidence of impairment.

For a prospective franchisee, this information is relevant because it provides insight into how Bojangles values its assets. The use of Level 3 inputs indicates a degree of subjectivity in these valuations, as they rely on internal estimates and assumptions rather than direct market data. Impairment charges are measured based on the amount by which the carrying amount of these assets exceeds their fair value. If Bojangles concludes that impairment exists, the carrying amount is reduced to fair value.