As of December 31, 2024, what was the total amount of Bonchon's capitalized software development costs?

According to Bonchon's 2025 Franchise Disclosure Document, as of December 31, 2024, the company had capitalized software development costs totaling $2,102,759. This figure reflects the costs associated with developing software for internal use that meet specific capitalization criteria under accounting standards. These costs are treated as assets on Bonchon's balance sheet and are included in "Property and equipment, net."

These capitalized costs include external direct costs of materials and services, payroll and payroll-related costs for employees directly involved in the software project, and any related interest costs. These costs are then depreciated over the estimated useful life of the software, which Bonchon estimates to be 3 years using the straight-line method. This accounting treatment allows Bonchon to spread the expense of the software over its useful life rather than recognizing the entire cost in the year it was developed.

For a prospective franchisee, understanding Bonchon's accounting practices can provide insight into how the company manages its assets and expenses. Capitalizing software development costs is a common practice that can impact the company's financial statements and profitability metrics. Reviewing these figures in the context of Bonchon's overall financial performance can help a franchisee assess the financial health and stability of the franchise system.