NOTE 7 — Intangible Assets
The details of the intangible assets are as follows:
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
| (in thousands) | | | | Weighted-average amortization period (in years) | | December 31, 2024 | | December 31, 2023 |
| Reacquired franchise rights | | | | 2.94 | | $ | 27,049 | | | $ | 27,049 | |
| Less: accumulated amortization | | | | | | (24,102) | | | (21,634) | |
| Intangibles, net | | | | | | $ | 2,947 | | | $ | 5,415 | |
Amortization expense included in our consolidated statements of operations was as follows:
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Year Ended December 31, |
| (in thousands) | | | | | | 2024 | | 2023 | | 2022 |
| Cost of sales | | | | | | $ | 2,468 | | | $ | 3,389 | | | $ | 4,034 | |
| | | | | | | | | | |
| | | | | | | | | | |
The estimated future amortization expense of the reacquired franchise rights as of December 31, 2024 is as follows:
| | | | | | | | |
| (in thousands) | | |
| | |
| 2025 | | $ | 1,435 | |
| 2026 | | 681 | |
| 2027 | | 383 | |
| 2028 | | 247 | |
| 2029 | | 153 | |
| Thereafter | | 48 | |
| Total | | $ | 2,947 | |
About Goodwill & Intangibles Disclosures
Goodwill and intangible asset disclosures reveal the premium paid in acquisitions and how management assesses whether that premium retains its value. Since goodwill is no longer amortized under US GAAP, the annual impairment test is the only mechanism that adjusts carrying values downward — making the assumptions behind that test critically important for investors.
Key signals: a history of goodwill impairments suggests management consistently overpays for acquisitions. Watch the gap between reporting unit fair value and carrying amount — when fair value exceeds carrying amount by less than 10-20%, a small decline in business performance could trigger a write-down. For finite-lived intangibles, examine useful life assumptions across customer relationships, technology, and trade names; aggressive estimates inflate near-term earnings. Compare total intangibles-to-total-assets ratios against peers to assess acquisition dependency. Rising goodwill as a percentage of equity can signal balance sheet fragility.