What was the accumulated amortization for Cicis' franchise agreements as of December 31, 2022?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
| 2023 | 2022 | ||
|---|---|---|---|
| Franchise agreements | $ 140,000 | $ | 140,000 |
| Accumulated amortization | (30,512) | (19,743) | |
| Franchise agreements, net | $ 109,488 | $ | 120,257 |
Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 58–64)
What This Means (2025 FDD)
According to Cicis' 2025 Franchise Disclosure Document, as of December 31, 2022, the accumulated amortization for franchise agreements was $19,743. This figure represents the total amount of amortization expense that has been recognized against the initial value of the franchise agreements up to that date. Amortization is the systematic allocation of the cost of an intangible asset (like franchise agreements) over its useful life.
For a prospective Cicis franchisee, understanding accumulated amortization is crucial for assessing the net value of franchise agreements on Cicis' balance sheet. The initial value of Cicis' franchise agreements was $140,000 in 2022. After subtracting the accumulated amortization ($19,743), the net value of franchise agreements was $120,257. This indicates how much of the initial investment in franchise agreements remains to be expensed in future periods.
It's important to note that amortization is a non-cash expense, meaning it doesn't involve an actual outflow of cash. However, it does reduce the reported net income of Cicis. Monitoring the amortization expense and accumulated amortization can provide insights into the financial health and accounting practices of the franchisor. A potential franchisee should review these figures in conjunction with other financial statement information to gain a comprehensive understanding of Cicis' financial position.