What was the amount of amortization of intangible assets for Black Bear Diner in 2023?
Black_Bear_Diner Franchise · 2025 FDDAnswer from 2025 FDD Document
and December 28, 2022 was $86,353 and $70,347, respectively.
NOTE 3 - INTANGIBLE ASSETS AND GOODWILL
Intangible assets consist of the following:
| Life | December 27, | December 28, | |
|---|---|---|---|
| in Years | 2023 | 2022 | |
| Intangible assets subject to amortization: | |||
| Trade name | 20 | $ 35,100,000 |
Source: Item 23 — RECEIPT (FDD pages 56–243)
What This Means (2025 FDD)
According to Black Bear Diner's 2025 Franchise Disclosure Document, the amortization expense on intangible assets subject to amortization was $3,017,051 for the year ended December 27, 2023. This figure includes $366,211 of amortization expense related to a related party trademark license agreement for the same period.
Amortization is the process of expensing the cost of an intangible asset over its useful life. Intangible assets are non-physical assets such as patents, trademarks, and goodwill. The amortization expense reflects the portion of the asset's value that has been used up during the accounting period. For Black Bear Diner franchisees, understanding these expenses is crucial as they can impact the overall profitability of the franchise.
The fact that a portion of the amortization expense is related to a trademark license agreement with a related party suggests that Black Bear Diner has specific arrangements for the use of its trademarks. This could have implications for franchisees in terms of brand usage and associated costs. Franchisees should be aware of these related-party transactions and how they might affect their financial obligations and the overall financial health of the franchise system.
Prospective franchisees should review the complete financial statements and related notes in the FDD to fully understand the nature and extent of Black Bear Diner's intangible assets and the associated amortization expenses. This will help them assess the long-term value and potential risks associated with the franchise investment.