Under what circumstances does Hardees test its trademarks/tradenames for impairment more frequently than annually?

According to Hardees's 2025 Franchise Disclosure Document, the company assesses its trademarks and tradenames for impairment at least annually. However, Hardees will conduct these tests more frequently if certain events or changes in circumstances suggest that the carrying amount of the intangible asset (i.e., the trademark or tradename) may not be recoverable. This implies that if there are indications that the value of the Hardees brand or its associated names has declined, the company will perform additional impairment tests beyond the standard annual review.

In practical terms, this means that factors like a significant drop in sales, negative publicity, or increased competition could trigger more frequent evaluations of the brand's value. These evaluations are crucial for Hardees to accurately reflect the value of its intangible assets on its financial statements. If an impairment is indicated, Hardees would need to write down the value of the trademark or tradename, which could impact the company's financial performance.

For a prospective Hardees franchisee, this highlights the importance of the overall health and reputation of the Hardees brand. While the franchisee's individual performance is important, the value of the Hardees trademark and tradename is a shared asset. Any events that negatively impact the brand's perception or financial performance could lead to impairment charges, which, while primarily affecting the franchisor's financial statements, could also reflect underlying issues affecting franchisee operations and profitability.