Note 7 – Goodwill and Intangible Assets

Goodwill represents the excess of cost over the fair value of identifiable net assets acquired related to the original purchase of the various franchise businesses and acquisition of company-owned transition studios. Goodwill is not amortized but is tested annually for impairment or more frequently if indicators of potential impairment exist. During the six months ended June 30, 2023, there was an increase of $4,866 in previously reported goodwill due to the acquisition of 14 Rumble studios as discussed in Note 3. The carrying value of goodwill at June 30, 2023 and December 31, 2022 totaled $170,563 and $165,697, respectively, net of cumulative impairment of $3,376.

Amortization expense was $2,885 and $5,840, for the three and six months ended June 30, 2023, respectively, and $2,757 and $5,405 for the three and six months ended June 30, 2022, respectively. During the six months ended June 30, 2023, the Company recorded a write down of franchise agreements, net of reacquired franchise rights, in the amount of $7,238 in connection with the acquisition of 14 Rumble studios as discussed in Note 3, which is included within selling, general and administrative expenses.