What was the amount of amortization for Cicis in 2022?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
| 2023 | 2022 | ||
|---|---|---|---|
| Goodwill | $ 23,802 | $ | 23,802 |
| Accumulated amortization | (6,744) | (4,364) | |
| Goodwill, net | $ 17,058 | $ | 19,438 |
| Franchise agreements | $ 140,000 | $ | 140,000 |
| Accumulated amortization | (30,512) | (19,743) | |
| Franchise agreements, net | $ 109,488 | $ | 120,257 |
During the years ended December 31, 2023 and 2022, 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, 2023 and 2022, 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.
Estimated amortization expense, based on the current carrying value of goodwill for each of the fiscal years 2024 through 2028 is $2,380.
Estimated amortization expense, based on the current carrying value of franchise agreements for each of the fiscal years 2024 through 2028 is $10,769.
Asset impairment assessments: The Company periodically evaluates the carrying value of long-lived assets to be held and used at the asset group level including, but not limited to, capital assets and intangible assets, when events and circumstances warrant such a review. The carrying value of a longlived asset is considered impaired when the anticipated undiscounted cash flow from such asset is less than its carrying value. In that event, a loss would be recognized based on the amount by which the carrying value exceeds the fair value of the long-lived asset. Fair value would be determined primarily using the anticipated cash flows disc
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 amortization expense associated with goodwill was $2,380 in 2022. Additionally, the amortization expense linked to franchise agreements totaled $10,769 during the same year. Both of these expenses are categorized under other general and administrative expenses on the combined statements of income.
For a prospective Cicis franchisee, understanding these amortization expenses is crucial for assessing the overall financial health and stability of the company. Amortization, in general accounting terms, refers to the systematic reduction of the carrying value of an intangible asset, such as goodwill or a franchise agreement. Goodwill typically arises when one company acquires another, representing the excess of the purchase price over the fair value of the identifiable net assets acquired. Franchise agreements, on the other hand, represent the rights granted to a franchisee to operate under the franchisor's brand and system.
The FDD also provides estimated amortization expenses for the upcoming years, 2024 through 2028, which remain consistent at $2,380 for goodwill and $10,769 for franchise agreements. This consistency may suggest a stable valuation of these intangible assets over the specified period. However, it's important to note that these are estimates based on the current carrying value and could be subject to change based on future events or circumstances. Cicis also periodically evaluates the carrying value of long-lived assets, including capital assets and intangible assets, and may recognize impairment losses if the anticipated cash flow from these assets is less than their carrying value.
Therefore, a potential franchisee should consider these factors and consult with a financial advisor to fully understand the implications of amortization expenses and asset valuations on Cicis's financial performance and future prospects. Understanding these accounting practices can help franchisees make informed decisions about their investment and assess the potential risks and rewards associated with the franchise opportunity.