What was the gross carrying amount of tradenames for Moes Southwest Grill as of December 29, 2024?
Moes_Southwest_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
| Weighted | ||||
|---|---|---|---|---|
| average | ||||
| amortization | Gross | Accumulated | Net | |
| period | carrying | amortization | carrying | |
| (years) | amount | amount | ||
| Definite-lived intangibles: | ||||
| Franchise agreements | 20 | $ 2,216 | $ (2,151) | $ 65 |
| Indefinite-lived intangibles: | ||||
| Tradenames | n/a | 306,123 | - | 306,123 |
| $ 308,339 | $ (2,151) | $ 306,188 |
Source: Item 23 — Receipts (FDD pages 92–334)
What This Means (2025 FDD)
According to Moe's Southwest Grill's 2025 Franchise Disclosure Document, the gross carrying amount of tradenames as of December 29, 2024, was $306,123. These tradenames are considered indefinite-lived intangibles, meaning they are not amortized. Instead, Moe's Southwest Grill evaluates them for impairment annually or more frequently if circumstances suggest potential impairment.
The evaluation involves either a qualitative or quantitative assessment. If the fair value of a tradename more likely than not exceeds its carrying value, no further evaluation is needed. However, if the carrying value exceeds the fair value, an impairment charge is recorded for the difference. This process ensures that the value of the tradenames on the company's books accurately reflects their current market value.
For a prospective franchisee, understanding the value and potential impairment of tradenames is important because it reflects the strength and recognition of the Moe's Southwest Grill brand. A strong, unimpaired tradename suggests a well-regarded brand with enduring market presence, which can contribute to the success of a franchise location. Conversely, significant impairment charges in the future could indicate a weakening brand, which could impact the franchisee's business.