How often does Noodles & Company analyze trademark rights for impairment?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
Intangibles, net consists primarily of reacquired franchise rights and trademarks. The Company amortizes the reacquired franchise rights over the remaining contractual terms of the reacquired franchise area development agreements at the time of acquisition, which ranged from approximately one year to eight years as of December 31, 2024. Trademark rights are considered indefinitelived intangible assets, the carrying value of which are analyzed for impairment at least annually (or more often, if necessary).
Source: Item 22 — CONTRACTS (FDD pages 98–99)
What This Means (2025 FDD)
According to Noodles & Company's 2025 Franchise Disclosure Document, the company analyzes the carrying value of its trademark rights for impairment at least annually. They may also conduct these analyses more frequently if necessary. Trademark rights are considered indefinite-lived intangible assets.
This means that Noodles & Company assesses the value of its trademarks regularly to ensure that their recorded value on the company's balance sheet accurately reflects their current worth. If the value of a trademark has declined, the company must recognize an impairment charge, reducing the asset's carrying value. This process is important for maintaining accurate financial reporting.
For a prospective franchisee, this indicates that Noodles & Company takes its trademarks seriously and actively manages their value. While this doesn't directly impact day-to-day operations, it reflects the franchisor's commitment to protecting its brand assets, which are crucial for the overall success of the franchise system. Regular impairment analysis suggests a proactive approach to brand management, which can be a positive sign for potential investors.