What is the total estimated future amortization expense for Carls' intangible assets?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
Amortization expense related to these intangible assets for fiscal 2024 and 2023 was $17,302 and $17,132, respectively. Our future amortization expense related to these intangible assets is set forth as follows:
| Years Ending January 31, |
|---|
| 2025 |
| 2026 |
| 2027 |
| 2028 |
| 2029 |
| Thereafter |
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 79–80)
What This Means (2024 FDD)
According to Carls's 2024 Franchise Disclosure Document, the amortization expense related to intangible assets for fiscal years 2024 and 2023 was $17,302 and $17,132, respectively. The document also includes a table outlining the estimated future amortization expense related to these intangible assets. This information is relevant to potential franchisees as it provides insight into the expected expenses associated with the amortization of intangible assets, such as franchise agreements and favorable lease agreements, over their useful lives. Understanding these expenses is crucial for projecting the financial performance of a Carls franchise.
The table details the estimated amortization expense for each of the five subsequent fiscal years, as well as the total amortization expense thereafter. For the fiscal year ending in 2025, the estimated amortization expense is $17,274. The estimated amortization expense for the fiscal years ending in 2026, 2027, 2028, and 2029 are $17,237, $17,188, $17,132, and $17,070, respectively. The estimated amortization expense thereafter is $112,248.
For a prospective Carls franchisee, this data offers a glimpse into the future financial obligations related to intangible assets. Amortization is a non-cash expense, but it impacts the reported profitability of the business. Franchisees should consider these figures when evaluating the overall financial viability of the franchise and planning for long-term profitability. It is important to note that these are estimates and actual amortization expenses may vary.
It would be prudent for potential franchisees to discuss with Carls the assumptions and methodology used to derive these estimates. Understanding the factors that could influence these expenses will allow franchisees to make more informed financial projections for their specific franchise location. Additionally, prospective franchisees may want to inquire about the specific intangible assets that are being amortized and their respective useful lives.