What is the amortization period for C12 Group's website and application?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Website and Applications: The Company has capitalized costs for the development and implementation of their website and application for the use by Chairs and members. Additional functionalities have been added and
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to C12 Group's 2025 Franchise Disclosure Document, the company amortizes the costs associated with the development and implementation of their website and application over a five-year period using the straight-line method. This means that the capitalized costs are evenly expensed over those five years. As of December 31, 2024, the accumulated amortization totaled $308,762, and as of December 31, 2023, it totaled $185,725.
For a prospective franchisee, understanding the amortization period is important because it affects C12 Group's reported financial performance. Capitalizing and amortizing these costs allows the company to spread the expense over the useful life of the assets (website and applications) rather than recognizing the entire expense in the year the costs were incurred. This can provide a more accurate picture of the company's profitability over time.
The fact that C12 Group capitalizes and amortizes these costs is a common accounting practice. The five-year amortization period suggests that the company expects the website and applications to provide economic benefits for that duration. A potential franchisee might want to inquire about the specific types of costs that are capitalized and included in the amortization schedule to better understand the company's investment in its digital assets.
It is important to note that these figures reflect the company's accounting practices and may not directly impact the franchisee's financial operations. However, understanding these practices can provide insight into how C12 Group manages and reports its financial performance, which can be useful for assessing the overall health and stability of the franchise system.