Under what circumstances does Brightstar Care evaluate its property and equipment for impairment?

According to Brightstar Care's 2025 Franchise Disclosure Document, the company assesses the value of its property and equipment for impairment when certain conditions arise. Specifically, Brightstar Care conducts an evaluation "whenever events or changes in circumstances indicate that the carrying amount may not be recoverable." This means that if there are any signs that the recorded value of the assets on the balance sheet might be higher than what the company could realistically recover from their use or sale, an impairment review is triggered.

If the estimated undiscounted future cash flows expected from the asset's use and eventual sale are less than its carrying amount, Brightstar Care recognizes an impairment loss. This indicates that the company writes down the asset's value to reflect its true recoverable amount. However, the document states that Brightstar Care did not identify any impairment of its property and equipment as of December 29, 2024, or December 31, 2023.

For a prospective Brightstar Care franchisee, this accounting policy is important because it provides insight into how the company manages and values its assets. While franchisees typically do not directly own the same types of property and equipment as the franchisor, understanding the franchisor's financial practices can offer a degree of reassurance about the company's overall financial health and stability. It also demonstrates that Brightstar Care is following standard accounting practices by regularly evaluating its assets for potential losses in value.