What was the accumulated amortization for Del Taco's franchise contracts considered as a definite-lived intangible asset in the earlier period?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
2.6 million at that time. The Company determined that there was no such triggering event for the Jack in the Box reporting unit.
The net carrying amounts of intangible assets other than goodwill with definite lives are as follows (in thousands):
| Gross Amount | Accumulated | Net Amount | Gross Amount | Accumulated | Net Amount | |
|---|---|---|---|---|---|---|
| Amortization | Amortization | |||||
| Definite-lived intangible assets: | ||||||
| Sublease assets | $ 2,671 | $ (694) | $ 1,977 | $ 2,671 | $ (620) | $ 2,051 |
| Franchise contracts | 9,700 | (1,554) | 8,146 | 9,700 | (1,389) | 8,311 |
| Reacquired franchise rights | 464 | (317) | 147 | 464 | (311) | 153 |
| $ 12,835 | $ (2,565 |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 58)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, the franchise contracts are considered definite-lived intangible assets. The accumulated amortization for these franchise contracts in the earlier period was $(1,389) thousand. The gross amount for franchise contracts was $9,700 thousand, resulting in a net amount of $8,311 thousand.
These figures represent the accounting treatment of Del Taco's franchise agreements as assets with a limited lifespan. The company amortizes the value of these agreements over their useful lives, reflecting the gradual decline in their value as they approach expiration. Accumulated amortization represents the total amount of the asset's value that has been expensed to date.
For a prospective Del Taco franchisee, understanding these figures is crucial for assessing the financial health and accounting practices of the franchisor. It provides insight into how Del Taco values and manages its franchise agreements, which can impact the overall financial performance and stability of the franchise system. Reviewing these figures over multiple periods can also reveal trends in the amortization of franchise contracts, which may indicate changes in the value or lifespan of these agreements.