What was the reported value of Circle K's franchise contracts as of April 28, 2024?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
2024 and 2023, respectively.
All the Company's property and equipment were purchased by Circle K Stores or affiliates on behalf of the Company.
5. Intangible Assets
Intangible assets consisted of the following:
| April 27, 2025 | April 28, 2024 | |
|---|---|---|
| Tradename | $ 1,301,112 | $ 1,301 |
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 99–100)
What This Means (2025 FDD)
According to Circle K's 2025 Franchise Disclosure Document, the reported value of franchise contracts as of April 28, 2024, was $54,487,980. This figure represents the initial value of the franchise agreements Circle K holds. It is important to note that this value is subject to amortization, which is the process of gradually writing off the initial cost of an asset over its useful life.
The FDD also indicates accumulated amortization related to these franchise contracts. As of April 28, 2024, the accumulated amortization was $41,712,766. This means that the original value of $54,487,980 has been reduced by this amount due to amortization expenses recognized over time. The net value of the franchise contracts, after accounting for accumulated amortization, was $14,399,954 as of April 28, 2024.
For a prospective Circle K franchisee, understanding these figures is crucial. The initial value of franchise contracts reflects the overall scale and potential revenue-generating capacity of Circle K's franchise system. The accumulated amortization and net value provide insights into how Circle K accounts for and manages the value of its franchise agreements over time. Reviewing these figures in the context of Circle K's financial statements can help a franchisee assess the financial health and stability of the franchise system.