When is C12 Group's amortization expected to be $11,995 annually through?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
Depreciation is provided at amounts calculated to amortize the cost of the assets over their estimated useful economic lives using straight line, generally with lives ranging from three to seven years.
Goodwill: Goodwill represents the cost of assets acquired in excess of fair value. Goodwill is amortized over a 10 year period. Amortization is expected to be $11,995 annually through 2031. Accumulate
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to C12 Group's 2025 Franchise Disclosure Document, goodwill is amortized over a 10-year period. The amortization is expected to be $11,995 annually through 2031. Goodwill represents the cost of assets acquired in excess of fair value. Accumulated amortization totaled $47,981 at December 31, 2024 and $35,986 at December 31, 2023. As a result of the sale of C12 Atlanta in 2023, the Company wrote off $80,862 in goodwill related to that subsidiary.
For a prospective C12 Group franchisee, this indicates that the company is systematically accounting for its goodwill, which is the premium paid above the fair market value of acquired assets. The consistent annual amortization expense of $11,995 through 2031 provides a predictable expense for the company. This also shows that C12 Group had a significant write-off of goodwill in 2023 due to the sale of C12 Atlanta, which could be a one-time event.
Understanding the amortization of goodwill can help a potential franchisee assess the financial stability and accounting practices of C12 Group. It's important to note that amortization is a non-cash expense, meaning it doesn't directly impact the company's cash flow but does affect its reported profits. The write-off of goodwill related to C12 Atlanta suggests that the company is actively managing its assets and making strategic decisions that can impact its financial statements.