What was the gross value of reacquired franchise rights for Burger King as of December 31, 2024?
Burger_King Franchise · 2025 FDDAnswer from 2025 FDD Document
.25 | | Anti-dilutive securities outstanding | | 4 | | 5 | 6 |
(a) Diluted weighted average common shares and earnings per share may not recalculate exactly as it is calculated based on unrounded numbers.
Note 5. Property and Equipment, net
Property and equipment, net, consist of the following (in millions):
| As of December 31, | |||||
|---|---|---|---|---|---|
| 2024 | 2023 | ||||
| Land | $ 952 | $ | 987 | ||
| Buildings and improvements | 1,334 | 1,193 | |||
| Restaurant equipment | 310 | 215 | |||
| Furniture, fixtures, and other | 280 | 347 | |||
| Finance leases | 331 | 335 | |||
| Constr |
Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 109–124)
What This Means (2025 FDD)
According to Burger King's 2025 Franchise Disclosure Document, as of December 31, 2024, the gross value of reacquired franchise rights was $374 million. The accumulated amortization for these rights was $22 million, resulting in a net value of $352 million. These reacquired franchise rights represent the fair value of reacquired franchise agreements, which are determined using the excess earnings method.
These reacquired franchise rights are amortized over the remaining term of the reacquired franchise agreement, with an estimated weighted average remaining term of 12 years. This amortization reflects the gradual expensing of the value of these rights over their useful life. The initial fair value of reacquired franchise rights acquired in connection with the Carrols acquisition on May 16, 2024, was $363 million.
The adjustments to the preliminary estimate of net assets acquired from Carrols resulted in a $16 million increase to goodwill, primarily due to a $22 million decrease in the estimated fair value of reacquired franchise rights, which was partially offset by changes in the estimated fair values of other net assets acquired. This indicates that the valuation of these rights can be subject to change during the measurement period as more information becomes available.