Impairment of Long-Lived Assets and Trademarks

6 Months Ended

Mar. 28, 2023

Impairment Of Long Lived Assets And Goodwill [Abstract]

Impairment of Long-Lived Assets and Trademarks

Note 13.  Impairment of Long-Lived Assets and Trademarks

Long-Lived Assets. We review our long-lived assets including land, property, and equipment for impairment when there are factors that indicate that the carrying amount of an asset may not be recoverable. We assess recovery of assets at the individual restaurant level and typically include an analysis of historical cash flows, future operating plans, and cash flow projections in assessing whether there are indicators of impairment. The recoverability of assets to be held and used is measured by comparing the net book value of the assets of an individual restaurant to the fair value of those assets. This impairment process involves significant judgment in the use of estimates and assumptions pertaining to future projections and operating results.

There were $76,000 of asset impairments in the two quarters ended March 28, 2023, related primarily to new assets deployed in restaurants where impairment was previously assessed, and the Company’s current analysis indicated impairment of assets associated with those restaurants. During the two quarters ended March 29, 2022, we recognized $1,753,000 in total asset impairments for three restaurants. Of this amount, $487,000 was related to two Good Times restaurants and $1,266,000 was related to one Bad Daddy’s restaurant.

Trademarks. Trademarks have been determined to have an indefinite life. We evaluate our trademarks for impairment annually and on an interim basis as events and circumstances warrant by comparing the fair value of the trademarks with their carrying amount. There was no impairment required to the acquired trademarks as of March 28, 2023 and March 29, 2022.