What valuation methodologies does Cinnabon use to estimate the fair value of its intangible assets?

According to Cinnabon's 2025 Franchise Disclosure Document, the company estimates the fair value of its intangible assets using multiple valuation methodologies, including discounted cash flow models. These intangible assets primarily consist of goodwill, tradenames, reacquired franchise rights, and franchise agreements. Cinnabon does not amortize goodwill or tradenames. These are evaluated for impairment annually or more frequently if circumstances suggest potential impairment. This evaluation can be qualitative or quantitative.

If Cinnabon performs a qualitative assessment and determines that the fair value of a reporting unit's net assets or tradename more likely than not exceeds the carrying value, no further evaluation is needed. However, if a quantitative assessment is performed, and the fair value exceeds the carrying value, the goodwill or tradename is not considered impaired. Conversely, if the carrying value exceeds the fair value, Cinnabon records an impairment charge for the difference.

The operating assumptions used in the discounted cash flow models are generally consistent with Cinnabon's past performance and with the projections and assumptions used in its current operating plan. However, the FDD notes that these assumptions are subject to change due to changing economic and competitive conditions. For the fiscal years ended December 29, 2024, and December 31, 2023, no impairment losses were recorded for goodwill, tradenames, or amortizable intangible assets.