What is the amortization amount associated with the non-competition agreement for Closet Storage Concepts?
Closet_Storage_Concepts Franchise · 2025 FDDAnswer from 2025 FDD Document
entifiable intangible assets recorded in connection with the October 31, 2013 More Space Place, Inc. acquisition shown net of accumulated amortization at December 31, 2022 consisted of the following:
| Gross | Amortization | Net | ||||
|---|---|---|---|---|---|---|
| Qualified | $ | 300,000 | $ 18 |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 59)
What This Means (2025 FDD)
According to Closet Storage Concepts' 2025 Franchise Disclosure Document, the amortization amount associated with the non-competition agreement is $118,333. The gross value of the non-competition agreement is $150,000, and the net value is $51,667.
This means that Closet Storage Concepts has a non-competition agreement valued at $150,000, which is being expensed over a period of time. As of the financial statement date, $98,333 of the original value has already been recognized as an expense (amortized), leaving a remaining net book value of $51,667.
For a prospective franchisee, this indicates that Closet Storage Concepts has invested in measures to protect its market position and brand by establishing non-competition agreements. The amortization of these agreements reflects the expense recognized over time as the benefit of these agreements is realized. Reviewing the terms of these agreements and understanding their duration would be a prudent step for a potential franchisee.