Goodwill and Intangible Assets

3 Months Ended

Mar. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

A summary of goodwill and intangible assets at March 31, 2019 and December 31, 2018 is as follows:



March 31, 2019	Weighted average amortization period (years)	Gross carrying amount		Accumulated amortization			Net carrying Amount
Customer relationships	11.0	$	173,063	(102,647		)	$	70,416
Noncompete agreements	5.0	14,500		(14,500		)	—
Order backlog	0.4	3,400		(3,400		)	—
Reacquired franchise rights	7.0	21,350		(9,403		)	11,947
		212,313		(129,950		)	82,363
Indefinite-lived intangible:
Trade and brand names	N/A	146,300		—			146,300
Total intangible assets		$	358,613	$	(129,950	)	$	228,663
Goodwill		$	199,513	$	—		$	199,513



December 31, 2018	Weighted average amortization period (years)	Gross carrying amount		Accumulated amortization			Net carrying Amount
Customer relationships	11.0	$	173,063	$	(99,439	)	$	73,624
Noncompete agreements	5.0	14,500		(14,500		)	—
Favorable leases	8.0	4,017		(2,345		)	1,672
Order backlog	0.4	3,400		(3,400		)	—
Reacquired franchise rights	7.0	21,349		(8,615		)	12,734
		216,329		(128,299		)	88,030
Indefinite-lived intangible:
Trade and brand names	N/A	146,300		—			146,300
Total intangible assets		$	362,629	$	(128,299	)	$	234,330
Goodwill		$	199,513	$	—		$	199,513

In connection with the adoption of ASC 842, as of January 1, 2019, the Company has derecognized the favorable leases intangible asset, and the favorable leases balance is now included in the ROU asset, net balance (Note 16). The Company determined that no impairment charges were required during any periods presented and the increase to goodwill was due to the acquisition of six franchisee-owned stores on January 1, 2018, and the acquisition of four franchisee-owned stores on August 10, 2018 (Note 4).

Amortization expense related to the intangible assets totaled $4,005 and $3,966 for the three months ended March 31, 2019 and 2018, respectively. Included within total amortization expense for the three months ended March 31, 2018 is $93 related to amortization of favorable leases. Amortization of favorable leases is recorded within store operations as a component of rent expense in the consolidated statements of operations. The anticipated annual amortization expense related to intangible assets to be recognized in future years as of March 31, 2019 is as follows:



	Amount
Remainder of 2019	$	11,864
2020	14,052
2021	14,124
2022	14,317
2023	14,155
Thereafter	13,851
Total	$	82,363

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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