Over what period does Pump It Up amortize goodwill?

According to Pump It Up's 2025 Franchise Disclosure Document, the company amortizes goodwill on a straight-line basis over a 10-year period. Goodwill, in this context, represents the excess of the purchase price over the fair value of the net assets acquired. This accounting practice means that the value of goodwill is systematically reduced over a decade, reflecting its gradual consumption or decline in value.

Pump It Up also reviews goodwill for potential impairment if certain events occur that suggest the company's fair value might be less than its carrying value. If impairment is likely, the company calculates the impairment as the amount by which the company's carrying value, including goodwill, exceeds its fair value. As of December 31, 2024 and 2023, the management of Pump It Up believed that no such triggering events had occurred, indicating that the goodwill was not impaired during those periods.

For a prospective Pump It Up franchisee, understanding how goodwill is treated is important, especially if they plan to acquire an existing franchise. The amortization of goodwill over 10 years affects the financial statements of the company and could have implications for its overall financial health and valuation. Additionally, the regular review for impairment ensures that the value of goodwill is realistically reflected, which can impact investment decisions and financial reporting.