What is the projected amortization expense for Bojangles' goodwill for the fiscal year 2029?
Bojangles Franchise · 2025 FDDAnswer from 2025 FDD Document
Definite-lived intangible assets acquired in a business combination are recorded at fair value as of the acquisition date and primarily consist of goodwill and franchise rights. Goodwill represents the excess of the consideration paid for businesses acquired by the Company over the fair value of the identifiable net assets at the dates of acquisitions. The Company follows the accounting alternative documented in Accounting Standards Update ("ASU") 2014-02, Intangibles-Goodwill and Other (Topic 350) to account for goodwill. Goodwill is amortized on a straight-line basis over 10 years.
Source: Item 22 — CONTRACTS (FDD page 82)
What This Means (2025 FDD)
According to Bojangles's 2025 Franchise Disclosure Document, goodwill is considered a definite-lived intangible asset and is amortized on a straight-line basis over 10 years. However, the document does not provide a specific breakdown of the annual amortization expense for goodwill or a projection for the fiscal year 2029. Instead, it provides the total amortization expense for the years 2022, 2023, and 2024, as well as future amortization expenses for fiscal years subsequent to December 29, 2024.
To determine the projected amortization expense for goodwill in 2029, a prospective Bojangles franchisee would need to understand the initial value of the goodwill and how it is being amortized over the 10-year period. Without this information, it is impossible to calculate the exact amount. The FDD does mention that goodwill represents the excess of the consideration paid for businesses acquired by Bojangles over the fair value of the identifiable net assets at the dates of acquisitions.
Therefore, a potential franchisee should ask Bojangles for more detailed financial information, including the schedule of goodwill amortization, to accurately project future expenses. Understanding the components of the total amortization expense and the specific amortization schedule for goodwill is crucial for financial planning and assessing the profitability of a Bojangles franchise.