What was the net value of Cicis' franchise agreements in 2023?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
airment were identified during the years ended December 31, 2023 and 2022.
Notes to Combined Financial Statements
Note 1. Organization and Summary of Significant Accounting Policies (Continued)
Goodwill and intangible assets as of December 31, 2023 and 2022, were as follows:
| 2023 | 2022 |
|---|
Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 58–64)
What This Means (2025 FDD)
According to Cicis' 2025 Franchise Disclosure Document, the net value of franchise agreements in 2023 was $109,488. This figure represents the initial value of the franchise agreements ($140,000) less accumulated amortization ($30,512). Amortization is the process of gradually writing off the initial cost of an asset over its useful life. For Cicis' franchise agreements, this means that the initial value is being reduced over time, reflecting the consumption of the asset's economic benefits.
For a prospective Cicis franchisee, understanding the amortization of franchise agreements is crucial for assessing the long-term value of the franchise. While the initial franchise fee might be a significant investment, the net value reflects the remaining economic benefit that Cicis attributes to those agreements. This can impact the franchisee's own accounting and valuation of their franchise asset.
It's also worth noting that Cicis' amortization expense for franchise agreements was $10,769 for both 2023 and 2022, and the estimated amortization expense for the fiscal years 2024 through 2028 is also $10,769. This consistent amortization expense suggests a stable and predictable reduction in the value of these agreements over time. Franchisees should consider these factors when evaluating the financial health and long-term prospects of a Cicis franchise.