What was the total amortization expense for Cicis in 2023?
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.
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 company had several amortization expenses in 2023. Amortization expense associated with goodwill totaled $2,380, while amortization expense tied to franchise agreements totaled $10,769. Additionally, amortization expense for the website totaled $25,667. All these expenses are presented with other general and administrative expenses on the combined statements of income.
In practical terms, amortization represents the expensing of an intangible asset's value over its useful life. For a Cicis franchisee, understanding these figures provides insight into how Cicis accounts for its intangible assets like goodwill, franchise agreements, and website development. These expenses can impact the company's profitability and overall financial health, which indirectly affects franchisees.
It's important to note that these amortization expenses are specific to Cicis as a company and not direct expenses that a franchisee would incur. However, the financial stability and accounting practices of the franchisor are crucial for franchisees to consider. Prospective franchisees should review the combined statements of income to understand how these expenses affect Cicis's financial performance. They may also want to inquire about the specific methodologies Cicis uses to determine the useful life and amortization schedule for these assets.