What is the gross amount associated with Qualified Franchise Agreements for Closet Storage Concepts?
Closet_Storage_Concepts Franchise · 2025 FDDAnswer from 2025 FDD Document
e assets recorded in connection with the October 31, 2013 More Space Place, Inc. acquisition shown net of accumulated amortization at December 31, 2023 consisted of the following:
| Gross | Amortization | Net | |
|---|---|---|---|
| Qualified | $ 30 |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 59)
What This Means (2025 FDD)
According to Closet Storage Concepts' 2025 Franchise Disclosure Document, the gross amount associated with Qualified Franchise Agreements is $300,000. This figure represents the initial value assigned to these agreements before any amortization. Amortization refers to the process of gradually writing off the initial cost of an asset over its useful life. In this case, the amortization amount for Qualified Franchise Agreements is $205,000, resulting in a net value of $95,000.
Additionally, the FDD lists a Non-Competition Agreement with a gross value of $150,000, an amortization of $108,333, and a net value of $41,667. The combined gross value of Qualified Franchise Agreements and the Non-Competition Agreement totals $450,000, with a total amortization of $313,333, resulting in a combined net value of $136,667.
For a prospective Closet Storage Concepts franchisee, understanding these figures is crucial for assessing the financial structure and long-term value of the franchise agreement. The initial gross value provides a baseline for the asset's worth, while the amortization schedule indicates how this value is recognized over time. The net value reflects the remaining economic benefit the company expects to derive from these agreements. Reviewing these figures in the context of the complete financial statements can provide a more comprehensive understanding of the franchise's financial health and stability.