What was the net value of Craters & Freighters' software development as of December 31, 2023?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
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Summary of software development as of December 31:
| As of December 31, | 2024 | 2023 |
|---|---|---|
| Software Development Costs Less: Accumulated Amortization | $ 631,405 $ | 471,116 |
| (434,154) | (317, |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 49)
What This Means (2025 FDD)
According to the 2025 FDD, Craters & Freighters' software development costs, net of accumulated amortization, was valued at $153,931 as of December 31, 2023. This figure represents the historical cost of the software development assets, less the total amortization expense recognized up to that date.
Software development costs are amortized, or expensed, over a three-year period using the straight-line method. This means that the cost of the software is evenly distributed as an expense over its useful life. For the years ended December 31, 2023 and 2022, the amortization expense totaled $101,989 and $99,763, respectively.
For a prospective franchisee, this indicates Craters & Freighters invests in software and technology, which is considered an asset. The net value reflects the remaining value of that investment after accounting for its use over time. Reviewing these figures over several years can show trends in Craters & Freighters's investment in and reliance on proprietary software.