What is the gross carrying amount for Carvel tradenames, which are considered indefinite-lived intangibles?

According to Carvel's 2025 Franchise Disclosure Document, the gross carrying amount for its tradenames, classified as indefinite-lived intangibles, is $306,123. This figure represents the historical cost of the tradenames before any accumulated amortization or impairment charges. Because Carvel does not amortize tradenames, the net carrying amount is also $306,123.

Intangible assets like tradenames are crucial for brand recognition and value. Carvel evaluates these assets annually (or more frequently if circumstances suggest potential impairment) to ensure their carrying value aligns with their fair value. This evaluation can be qualitative or quantitative, and if the carrying value exceeds the fair value, an impairment charge is recorded to reflect the loss in value. However, the document states that no impairment losses were recorded for tradenames during the fiscal years ended December 29, 2024, December 31, 2023, and December 25, 2022.

For a prospective Carvel franchisee, understanding the value and treatment of these intangible assets is important. The tradenames represent a significant portion of the brand's overall value, and the fact that they are not amortized suggests that Carvel views them as having an indefinite life. This can be a positive sign, indicating the company's confidence in the long-term strength and recognition of its brand. However, franchisees should also be aware that the value of these assets can be impacted by changing market conditions and the company's ability to maintain its brand reputation.