What was the amount of depreciation and amortization for C12 Group in 2023?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
rovided at amounts calculated to amortize the cost of the assets over their estimated useful economic lives using straight line and accelerated methods, 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. Accumulated amortization totaled $35,986 at December 31, 2023 and $23,990 at December 31, 2022. 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 of its members. Additional functionalities have been added and also capitalized. These intangible assets are amortized using the straight-line method over a five year life. Accumulated amortization totaled $185,725 at December 31, 2023 and $152,530 at December 31, 2022.
Leases: The Company determines if an arrangement is an operating or financing lease at commencement. The Company has determined that it has no finance lease arrangements at December 31, 2023 or 2022. For all other leases, lease assets and obligations are recognized at the lease commencement date based on the present value of lease payments over the term of the lease. The Company utilizes the risk-free discount rate, according to the Company's elected policy.
Income Taxes: The Company, as an LLC, is not a taxpaying entity for federal income tax purposes. Accordingly, income and loss are passed directly to its members and taxed at their individual level. Management is not aware of any tax positions that would have a significant impact o
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to C12 Group's 2025 Franchise Disclosure Document, the company's goodwill is amortized over a 10-year period, with an expected annual amortization of $11,995 through 2031. The accumulated amortization for goodwill totaled $35,986 as of December 31, 2023. Additionally, C12 Group capitalizes costs related to the development and implementation of their website and applications, which are amortized using the straight-line method over a five-year life. The accumulated amortization for website and applications totaled $185,725 as of December 31, 2023.
In 2023, C12 Group sold C12 Atlanta, resulting in a write-off of $80,862 in goodwill related to that subsidiary. This sale impacts the overall financial picture of the company and should be considered when evaluating the financial health of the franchise. The FDD also mentions operating leases for office space and equipment, with rent expenses totaling approximately $134,000 in 2023.
For a prospective franchisee, understanding these amortization and depreciation figures is crucial for assessing the company's financial management and the value of its assets. The consistent amortization of goodwill and website/application costs provides insight into how C12 Group manages its intangible assets. The sale of C12 Atlanta and the subsequent write-off of goodwill highlight the importance of understanding the company's strategic decisions and their financial implications.
It is important to note that while the FDD provides information on accumulated amortization and specific write-offs, it does not explicitly state the total depreciation and amortization expense for 2023. A prospective franchisee may want to request a full income statement to see the total amount of depreciation and amortization for the year.