What was the value of the acquired customers and trademarks/trade names as determined by Bw Premier Collection?
Bw_Premier_Collection Franchise · 2025 FDDAnswer from 2025 FDD Document
eg)
November 30, 2024
The total purchase price was allocated based upon: (i) the amounts reported in the WH historical financial statements for any assets that were reported at fair value in accordance with WH's historical accounting policies, and (ii) management's estimates of fair value. The Company determined estimated fair value for other intangible assets with the assistance of valuations performed by third-party specialists. Other intangible assets of acquired customers and trademarks and trade names were valued at $2.1 million and $1.3 million, respectively. To the extent the consideration exceeded the fair value of the net assets acquired in this transaction, the excess was assigned to goodwill.
As of August 31, 2024 and 2023, quantitative analyses of goodwill and other intangible asset impairment were performed. To estimate the fair value of goodwill for the reporting unit, the Company utilized a combination of income-based and market-based approaches. The income-based approach utilized a discounted cash flow analysis which considered future growth and profitability. Significant inputs included the discount rate and the terminal growth rate. The market-based approach considered comparable businesses' quoted market prices and market multiples, and a control premium. No impairment was recorded for the years ended November 30, 2024 and 2023. To estimate the fair value of the indefinitelived trademarks and trade name, the Company utilized an income-based approach, specifically the relief-from-royalty approach. Significant inputs included revenue growth, royalty rate, and discount rate. No impairment was reco
Source: Item 23 — Receipts (FDD pages 54–203)
What This Means (2025 FDD)
According to Bw Premier Collection's 2025 Franchise Disclosure Document, the company determined the estimated fair value for intangible assets with assistance from third-party specialists. The intangible assets of acquired customers were valued at $2.1 million, while trademarks and trade names were valued at $1.3 million. The document also mentions that any excess consideration over the fair value of net assets acquired was assigned to goodwill. These valuations are part of the accounting procedures following the acquisition of WorldHotels (WH).
Bw Premier Collection uses these valuations to manage its financial reporting and assess the performance of its intangible assets. The company performs quantitative analyses of goodwill and other intangible asset impairment to estimate fair value, utilizing a combination of market and income approach valuation methods. These methods include quoted market prices, market multiples of comparable businesses, and discounted cash flow analysis. No impairment was recorded for the years ended November 30, 2024, and 2023, indicating that the value of these assets was maintained.
For a prospective franchisee, understanding these valuations and how they are maintained is important because it reflects the financial health and management practices of Bw Premier Collection. The trademarks and trade names are considered indefinite-life assets and are not subject to amortization, further highlighting their long-term value to the company. This information can provide reassurance about the stability and brand equity associated with a Bw Premier Collection franchise.