What is the gross carrying value of Brand and other indefinite-lived intangibles for The Standardx?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
-----------------------------------------------------|----------------------------------------------|-------------------------|----|-----------------------------|--|--------------------| | | Weighted average useful lives in years | Gross carrying value | | Accumulated amortization | | Net carrying value | | Management and hotel services agreement and | 19 | $ 1,368 | $ | (290) $ | | 1,078 | | franchise agreement intangibles | | | | | | | | Brand and other indefinite-lived intangibles | — | 806 | | — | | 806 | | Customer relationships intangibles | 10 | 410 | | (153) | | 257 | | Other intangibles | 10 | 35 | | (9) | | 26 | | Total | | $ 2,619 | $ | (452) $ | | 2,167 |
| | Gross carrying | Accumulated | Net carrying value | |----
Source: Item 23 — Receipts (FDD pages 85–132)
What This Means (2025 FDD)
According to The Standardx's 2025 Franchise Disclosure Document, the gross carrying value for brand and other indefinite-lived intangibles is $806 as of December 31, 2024. These intangible assets are acquired through various asset acquisitions and business combinations. The Standardx evaluates these assets for impairment annually during the fourth quarter, using balances at October 1, and at interim dates if indicators of impairment exist.
The Standardx uses the relief from royalty method to estimate the fair value of these indefinite-lived intangible assets. This involves internally-developed discounted future cash flow models and third-party valuation specialist models. These models require judgment in assumptions such as projected future cash flows, discount rates, and market royalty rates. The estimates are based on historical data, internal estimates, and external sources, primarily classified as Level Three assumptions, and are developed as part of the company's routine, long-term planning process.
The Standardx compares the estimated fair value to the carrying value. If the carrying value exceeds the fair value, an impairment charge is recognized in asset impairments on the consolidated statements of income. For a prospective franchisee, understanding how The Standardx values and manages these intangible assets is crucial, as it reflects the brand's strength and potential for future revenue generation. Any significant impairment could signal underlying issues with the brand or its market position, which could impact the franchisee's investment.