What was the reported value of Cicis' website in 2024?
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 combined statements of income.
Estimated amortization expense, based on the current carrying value of the website for each of the fiscal years 2025 through 2027 is $44,000 and for fiscal year 2028 is $18,333.
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 discounted at a rate commensurate with the risk involved. Losses on long-lived assets to be disposed of are determined in a similar manner, except that fair values are reduced for the cost to dispose. There were no such impairment losses recognized for the years ended December 31, 2024 and 2023.
Revenue recognition: The Company accounts for revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers, which provides a five-step model for recognizing revenue from contracts with customers as follows:
- Identify the contract with a customer
- Identify the performance obligations in the contract
- Determine the transaction price
- Allocate the transaction price to the performance obligations in the contract
- Recognize revenue when or as performance obligations are satisfied
Notes to Combined Financial Statements
Note 1. Organization and Summary of Significant Accounting Policies (Continued)
The Company's revenue consists of franchise revenue, which includes franchise royalties, technology and support fees, advertising fund contributions, initial and renewal franchise fees, and upfront fees from development agreements and territory agreements.
Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 58–64)
What This Means (2025 FDD)
According to Cicis' 2025 Franchise Disclosure Document, the company's website had a gross value of $220,000 in 2024. After accounting for accumulated amortization of $69,667, the net value of the website was reported as $150,333 as of December 31, 2024.
This indicates that Cicis considers its website to be a significant asset, though its value is decreasing over time due to amortization. Amortization is the process of gradually writing off the initial cost of an asset over its useful life. The annual amortization expense for the website was $44,000 in 2024, which reduces the website's net book value on Cicis' balance sheet.
For a prospective franchisee, this information provides insight into Cicis' investment in its online presence. The website is likely a key component of Cicis' marketing and customer engagement strategy. The consistent amortization expense suggests that Cicis anticipates the website will continue to provide value for several years, although its value will diminish over time. The estimated amortization expense for the fiscal years 2025 through 2027 is $44,000 and for fiscal year 2028 is $18,333.
It's worth noting that the FDD also mentions that Cicis has a trademark and other intellectual property license agreement with Yes Caps, LLC, which grants Cicis an exclusive, royalty-free license to use the trademarks and other intellectual property. This agreement is separate from the website asset but highlights the importance of intellectual property to the Cicis brand.