What is the expected amortization expense for the Budget franchise in 2027, excluding the effects of currency exchange rates?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
---------------------------------------------------------------|-------|----------|--------------------|----------| | | 2024 | | 2023 | 2022 | | | ¢ 17 | $ | 14 | $ 29 | | License agreements | Q | • | 9 | 10 | | Customer relationships | A | | 6 | 5 | | Other | $ 30 |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 79)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, the company anticipates an amortization expense of approximately $15 million in 2027, excluding any impact from currency exchange rates. This projection is based on the company's amortizable intangible assets as of December 31, 2024.
For a prospective Budget franchisee, understanding the amortization expense is crucial as it reflects the expense recognized for the depreciation of intangible assets over time. These assets could include items like franchise rights, trademarks, or other intellectual property. The amortization expense impacts Budget's overall profitability and financial health, which indirectly affects franchisees through factors like brand strength and available support services.
It's important to note that this is just a projection, and the actual amortization expense could differ due to various factors, including changes in the value of intangible assets or modifications in accounting practices. Franchisees should consider this projection as part of their broader due diligence, assessing the overall financial stability and forecasting accuracy of Budget.