What was the accumulated amortization for Cicis' website as of December 31, 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 December 31, 2023, was $25,667. The original cost of the website was $220,000 in both 2023 and 2024. After subtracting the accumulated amortization, the net book value of the website was $194,333 as of December 31, 2023.
Amortization is the systematic allocation of the cost of an intangible asset over its useful life. In this case, Cicis is amortizing the cost of its website over a period of time, reflecting the gradual decline in the website's value as it becomes outdated or is replaced. The amortization expense for the website was $25,667 in 2023 and increased to $44,000 in 2024. This expense is included 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. The consistent amortization expense suggests a structured approach to managing the website's value. The estimated amortization expense for the website is $44,000 for each of the fiscal years 2025 through 2027, and $18,333 for fiscal year 2028.