What was the net carrying amount of Carvel's tradenames, classified as indefinite-lived intangibles, as of December 29, 2024?

According to Carvel's 2025 Franchise Disclosure Document, the net carrying amount of its tradenames, which are classified as indefinite-lived intangibles, was $306,123 as of December 29, 2024. The gross carrying amount of the tradenames was also $306,123, with no accumulated amortization. This indicates that Carvel does not amortize its tradenames, which is a common practice for assets with indefinite lives. Instead, Carvel evaluates these tradenames for impairment annually or more frequently if circumstances suggest a potential decline in value.

Intangible assets like tradenames are a crucial part of a franchise system's value. Carvel assesses the fair value of its tradenames using qualitative and quantitative methods, including discounted cash flow models. If the carrying value of a tradename exceeds its fair value, Carvel would record an impairment charge 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, and December 31, 2023.

For a prospective Carvel franchisee, the value and stability of the tradenames are significant. A strong, well-maintained tradename can contribute to brand recognition and customer loyalty. The fact that Carvel regularly assesses its tradenames for impairment and has not recorded any losses in recent years suggests that the brand's tradenames are considered to be of stable value. This can provide some reassurance to franchisees about the long-term strength and recognition of the Carvel brand.