Under what condition does Pump It Up review goodwill for potential impairment?

According to Pump It Up's 2025 Franchise Disclosure Document, goodwill is reviewed for potential impairment if a triggering event occurs. This event would indicate that the company's fair value may be below its carrying value. If impairment is likely, Pump It Up calculates goodwill 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 triggering events had occurred.

In simpler terms, Pump It Up assesses the value of its goodwill (an intangible asset representing the excess of the purchase price over the fair value of acquired net assets) when something happens that suggests the company might be worth less than what's recorded on its books. This could be due to various factors like economic downturns, loss of key customers, or significant changes in the industry.

For a prospective franchisee, this means that the financial health and stability of the Pump It Up franchise system are regularly monitored. The fact that management reported no triggering events in the past two years suggests a stable financial outlook. However, it's important to note that these assessments are based on management's judgment and assumptions, and future events could lead to different conclusions. Franchisees should stay informed about the overall performance of the Pump It Up system and any potential factors that could impact its value.