What was the net value of Cicis' website asset as of December 31, 2024?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
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 | 2023 | |
|---|---|---|
| Website | $ 220,000 | $ 220,000 |
| Accumulated amortization | (69,667) | (25,667) |
| Website, net |
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 the website asset as of December 31, 2024, was $150,333. This figure represents the book value of the website after accounting for accumulated amortization, which reflects the decline in value of the asset over its useful life. In comparison, the net value of the website asset as of December 31, 2023, was $194,333, indicating a decrease in value during 2024.
For a prospective Cicis franchisee, understanding the value and amortization of assets like the website is important. The website is a crucial tool for marketing, customer engagement, and online ordering. The decrease in the website's net value from 2023 to 2024 suggests that Cicis may have expensed a significant portion of the website's cost through amortization or that the company may not have invested significantly in website improvements or updates during that period.
It's also worth noting that Cicis expenses costs incurred during the operating stage of the website as they occur, rather than capitalizing them as part of the asset's value. This accounting practice can affect the reported value of the website asset on the balance sheet. Franchisees may want to inquire about Cicis' strategy for maintaining and updating the website, as well as the expected future investments in this area, to ensure it remains an effective tool for their business.
Furthermore, the FDD mentions that Cicis periodically evaluates the carrying value of long-lived assets, including intangible assets like the website, for impairment. If the anticipated cash flow from the asset is less than its carrying value, an impairment loss would be recognized. The fact that no such impairment losses were recognized for the years ended December 31, 2024 and 2023, suggests that Cicis believes the website will continue to provide value to the company.