How often are the intangible assets of Exit reviewed for impairment?

According to Exit's 2025 Franchise Disclosure Document, intangible assets are reviewed annually for impairment. Additionally, a review is conducted if events or circumstances suggest that the carrying amount of the assets may not be recoverable. This means that Exit assesses the value of its intangible assets, such as franchise rights, at least once a year to determine if their recorded value on the balance sheet still accurately reflects their fair market value.

This annual review is a standard accounting practice to ensure that the company's assets are not overvalued. If the review indicates that the value of an intangible asset has declined, Exit will record an impairment charge to reduce the asset's carrying value to its fair market value. This can impact the company's financial statements and profitability in the year the impairment is recognized.

For a prospective franchisee, this indicates that Exit is actively monitoring the value of its assets and making adjustments as necessary. While no impairments were recorded for the years 2022, 2023, and 2024, the ongoing evaluation provides transparency into the financial health and stability of the company. Understanding how Exit manages and values its intangible assets can give franchisees confidence in the long-term viability of the franchise system.