What is the weighted average useful life in years for the Checkers franchise agreements acquired?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
2,923) | | Net assets acquired | 66,053 | | Goodwill | $ 31,766 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
The fair values of identifiable intangible assets acquired as of the restructuring date are as follows:
| | Acquisition Date Fair Value | Weighted Average Useful L
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 91)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, the weighted average useful life for franchise agreements acquired is 15 years. This means that Checkers amortizes the value of these franchise agreements over a 15-year period for accounting purposes. Amortization is a method of spreading the cost of an intangible asset over its useful life.
For a Checkers franchisee, this information is relevant in understanding how Checkers values its intangible assets, including franchise agreements. While it may not directly impact the franchisee's day-to-day operations, it provides insight into the financial structure and accounting practices of the franchisor.
The FDD also mentions that franchise agreements are amortized based on the expected future benefits to be realized, and amortization expense is recorded on a straight-line basis over the 15-year period. This indicates a consistent and predictable method of accounting for these assets. Additionally, the document notes different amortization periods for franchise agreements depending on whether they relate to the Successor (15 years) or Predecessor (27 years), highlighting changes due to restructuring.