What was the net value of tradenames for Checkersrallys as of January 1, 2024?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
26 | 3,166 | | 2027 | 3,166 | | 2028 | 3,166 | | 2029 | 3,166 | | Thereafter | $ 11,042 | | Total | 26,872 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Intangible assets consisted of the following as of December 30, 2024 (Successor) and January 1, 2024 (Successor):
| (Successor) |
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Source: Item 21 — FINANCIAL STATEMENTS (FDD page 91)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, the net value of its tradenames as of January 1, 2024, was $197,500. These tradenames are considered indefinite-lived intangible assets. The valuation of these tradenames is determined using the relief from royalty and income approach, specifically the multi-period excess earning method.
This valuation method relies on significant unobservable inputs and requires considerable judgment and estimates from a third-party valuation specialist. These estimates include the amount and timing of future cash flows, which can significantly impact the assessed value of the tradenames.
For a prospective Checkersrallys franchisee, understanding the valuation of tradenames is crucial as it reflects the brand's strength and market recognition. While the FDD provides this valuation, it's important to recognize that it's based on estimates and assumptions about future performance. Franchisees should consider how these intangible assets contribute to the overall value and potential success of their investment.
It is also worth noting that the net value of definite-lived intangible assets was $1,349 as of January 1, 2024, contributing to a total intangible asset value of $198,849. These figures provide a snapshot of the company's intangible assets at a specific point in time and can be used to assess the overall financial health and brand equity of Checkersrallys.