What was the accumulated amortization for Cicis' website in 2023?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
| Goodwill | $ | 23,802 | $ | 23,802 | ||
|---|---|---|---|---|---|---|
| Accumulated amortization | (9,124) | (6,744) | ||||
| Goodwill, net | $ | 14,678 | $ | 17,058 | ||
| Franchise agreements | $ | 140,000 | $ | 140,000 | ||
| Accumulated amortization | (41,281) | (30,512) | ||||
| Franchise agreements, net | $ | 98,719 | $ | 109,488 |
During the years ended December 31, 2024 and 2023, amortization expense associated with goodwill totaled $2,380 for each year, and is presented with other general and administrative expenses on the combined statements of income.
During the years ended December 31, 2024 and 2023, amortization expense associated with franchise agreements totaled $10,769 for each year, and is presented with other general and administrative expenses on the combined statements of income.
Notes to Combined Financial Statements
Note 1. Organization and Summary of Significant Accounting Policies (Continued)
Estimated amortization expense, based on the current carrying value of goodwill for each of the fiscal years 2025 through 2029 is $2,380.
Estimated amortization expense, based on the current carrying value of franchise agreements for each of the fiscal years 2025 through 2029 is $10,769.
Website: The Company has developed a website for the restaurant operations. The website is operational, and therefore costs incurred during the operating stage are expensed as incurred. Website asset as of December 31, 2024 and 2023, is as follows:
| | 2024 | 2
Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 58–64)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, the accumulated amortization for the website as of 2023 was $25,667. The initial cost of the website was $220,000 in both 2023 and 2024. After subtracting the accumulated amortization from the initial website cost, the net website value was $194,333 in 2023.
Amortization is the process of gradually writing off the initial cost of an asset over its useful life. In Cicis's case, the website's value is being reduced over time to reflect its wear and tear or obsolescence. The amortization expense associated with the website totaled $25,667 in 2023. This expense is presented with marketing general and administrative costs on the combined statements of income.
For a prospective Cicis franchisee, understanding these figures is important for assessing the company's financial management and asset valuation practices. It shows how Cicis accounts for its digital assets and manages expenses related to its online presence. The FDD also notes that the estimated amortization expense for the website is projected to be $44,000 for each of the fiscal years 2025 through 2027, and $18,333 for fiscal year 2028.