What is Bumble Roofing's obligation regarding the remaining useful life of franchise agreements, trademarks, and internally developed software?
Bumble_Roofing Franchise · 2025 FDDAnswer from 2025 FDD Document
software, and trademarks are being amortized on a straight-line basis over 5-15 years.
The Company periodically evaluates whether changes have occurred that would require revision of the remaining estimated useful life of the franchise agreements, trademarks, and internally developed software as well as whether changes have occurred to determine if all intangible assets are recoverable.
Goodwill is not amortized, but is tested for impairment using a fair value approach. If the fair value of the reporting unit is less than its carrying value, or if the fair value of the goodwill has been diminished, an impairment loss would be recorded to the extent of that difference. The Company tests for impairment as of September 30 annually. Goodwill will be tested for impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value or diminish the fair value of the goodwill.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 53)
What This Means (2025 FDD)
According to Bumble Roofing's 2025 Franchise Disclosure Document, the company periodically assesses whether adjustments are needed for the estimated useful life of its franchise agreements, trademarks, and internally developed software. This involves evaluating if any changes have occurred that would necessitate revising the remaining estimated useful life of these assets. Additionally, Bumble Roofing determines whether changes have occurred that affect the recoverability of all intangible assets.
For a prospective Bumble Roofing franchisee, this means that the value of key intangible assets like the franchise agreement itself, the brand's trademarks, and any proprietary software used in the business, are subject to ongoing review. The initial value assigned to these assets and the period over which they are amortized (written off) can be adjusted if circumstances change. This could impact the franchisee's financial statements and tax obligations, as amortization expense affects reported profits.
This evaluation ensures that the financial statements accurately reflect the value of these assets. If the value of an asset has decreased, it may need to be written down, which would affect the company's financial position. Conversely, if the useful life is extended, the amortization expense could be spread out over a longer period. This process is important for maintaining the integrity of Bumble Roofing's financial reporting and providing a realistic view of the company's assets.
Bumble Roofing amortizes the value associated with franchise agreements, internally developed software, and trademarks using the straight-line method over periods ranging from 5 to 15 years. The estimated useful life for franchise agreements is 7 years, for internally developed software is 5 years, and for trademarks is 15 years. Goodwill, however, is not amortized but is tested for impairment annually or when events occur that suggest its value may have declined.