What is the estimated amortization expense for Cicis' website for each of the fiscal years 2025 through 2027?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
| 23 | ||
|---|---|---|
| Website | $ 220,000 | $ 220,000 |
| Accumulated amortization | (69,667) | (25,667) |
| Website, net | $ 150,333 | $ 194,333 |
During the years ended December 31, 2024 and 2023, amortization expense associated with the website totaled $44,000 and $25,667, respectively, and is presented with marketing general and administrative costs on the combin
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 estimated amortization expense for the website is $44,000 for each of the fiscal years 2025 through 2027. For the fiscal year 2028, the estimated amortization expense is $18,333.
Amortization is the process of spreading out the cost of an intangible asset over its useful life. In this case, Cicis is amortizing the cost of its website over several years. This expense is presented with marketing general and administrative costs on the combined statements of income.
For a prospective Cicis franchisee, understanding these amortization expenses can provide insight into the company's financial management and how it accounts for its assets. It's important to note that these are estimated expenses, and the actual amounts may vary. Additionally, the FDD mentions that the company periodically evaluates the carrying value of long-lived assets, including intangible assets, and may recognize impairment losses if necessary, which could affect the amortization expense.