What was the accumulated amortization for Chem Dry's patents and trademarks as of December 31, 2021?
Chem_Dry Franchise · 2024 FDDAnswer from 2024 FDD Document
| 2022 | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | ||||
| Amortized intangible assets: | |||||||||
| Franchise agreements | $ 32,215 | $ | 11,151 | $ 32,215 | $ | 8,684 | $ 37,900 | $ | 7,288 |
| Trade names | 7,400 | 3,375 | 7,503 | 2,655 | 8,500 | 2,104 | |||
| Patented technology | 7,600 | 4,886 | 7,650 | 3,801 | 7,600 | 2,714 | |||
| Internal software | 1,818 | 1,766 | 1,818 | 1,745 | 1,800 | 1,443 | |||
| Patents and trademarks | 514 | 105 | 297 | 32 | 297 | 32 | |||
| Total amortized intangible | $ 49,547 | $ | 21,283 | $ 49,483 | $ | 16,917 | $ 56,097 | $ | 13,581 |
| assets | |||||||||
| Goodwill | $ 10,519 | $ | - | $ 56,056 | $ | - | $ 57,322 | $ | - |
Source: Item 23 — Receipts (FDD pages 68–264)
What This Means (2024 FDD)
According to Chem Dry's 2024 Franchise Disclosure Document, the accumulated amortization for patents and trademarks as of December 31, 2021, was $32. This figure reflects the total amount of amortization that has been recognized against the original cost of Chem Dry's patents and trademarks up to that date. It's important to note that the financial figures in the document are presented with the thousands omitted. Therefore, the actual accumulated amortization is $32,000.
Amortization is the systematic allocation of the cost of an intangible asset over its useful life. For a Chem Dry franchisee, understanding the amortization of intangible assets like patents and trademarks is crucial for assessing the financial health and long-term value of the franchise system. These assets represent the intellectual property and brand recognition that Chem Dry leverages, and their amortization reflects the gradual decline in their value over time.
The accumulated amortization provides insight into how much of the original cost of these assets has already been expensed. A higher accumulated amortization relative to the gross carrying amount might suggest that these assets are nearing the end of their useful lives, which could have implications for future investments in intellectual property or brand development by Chem Dry. Conversely, a lower accumulated amortization could indicate that these assets still have significant remaining value.
Prospective franchisees should consider these figures in conjunction with other financial data in the FDD to gain a comprehensive understanding of Chem Dry's financial position and the value of its intangible assets. It is also advisable to inquire about Chem Dry's strategy for maintaining and updating its patents and trademarks to ensure the continued strength and relevance of its brand.