What were the right of use asset impairment charges for Brueggers Bagels in 2024?

According to Brueggers Bagels's 2025 Franchise Disclosure Document, the company recorded impairment charges of $0.2 million during the fiscal year ended December 31, 2024. This total impairment charge includes less than $0.1 million specifically attributed to right of use asset impairments. These right of use asset impairments were recorded within occupancy expense in the company's consolidated statements of operations.

For a prospective franchisee, understanding impairment charges is crucial. Impairment charges reflect a reduction in the value of assets, which in this case includes right of use assets related to leased properties. The fact that Brueggers Bagels recognized these charges suggests that the expected future economic benefits from these assets have decreased. This could be due to underperforming locations or changes in market conditions.

The FDD also indicates that in 2023, Brueggers Bagels recorded $0.1 million in right of use asset impairments, and in 2022, the company recorded $2.0 million in right of use asset impairments. The fluctuations in these charges year-to-year could reflect changes in the performance of Brueggers Bagels locations and the overall economic environment. Franchisees should inquire about the specific factors that led to these impairments and what strategies Brueggers Bagels has in place to mitigate future impairment losses.

It's important for potential franchisees to consider these impairment charges as part of their due diligence. While impairment charges are a normal part of business operations, significant or recurring charges could indicate underlying issues with the financial health or operational efficiency of Brueggers Bagels. Prospective franchisees should discuss these figures with the franchisor and seek professional financial advice to fully understand the implications for their investment.