What was the net value of Dickeys Barbecue Pit's intangible assets as of May 31, 2023?
Dickeys_Barbecue_Pit Franchise · 2024 FDDAnswer from 2024 FDD Document
goodwill is approximately $1,940,000 per year for fiscal years 2025 through 2026.
NOTE 6: OTHER INTANGIBLE ASSETS
Other intangible assets consisted of the following:
| May 31, | 2024 | 2023 | 2022 |
|---|---|---|---|
| . | A 40 407 775 | Å 10 10 T | |
| Franchise agreements | $ 10,187,775 | $ 10,187,775 | $ 10,187,775 |
| Incentive agreements | 6,248,502 | 6,248,502 | 6,248,502 |
| Website domains | 50,000 | 50,000 | 50,000 |
| 16,486,277 | 16,486,277 |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 95)
What This Means (2024 FDD)
According to Dickeys Barbecue Pit's 2024 Franchise Disclosure Document, the net value of their intangible assets as of May 31, 2023, was $8,816,015. Intangible assets include items like franchise agreements, incentive agreements, and website domains, less accumulated amortization. These assets are not physical but represent value to the company.
For a prospective franchisee, understanding the value and composition of these intangible assets is crucial. These assets, particularly franchise agreements and brand recognition, contribute to the overall value proposition of the Dickeys Barbecue Pit franchise. The value of franchise agreements was listed at $10,187,775 in 2023. Amortization, which reduces the value of these assets over time, is also an important consideration.
The FDD also lists the gross value of intangible assets before accumulated amortization. As of May 31, 2023, the gross value of franchise agreements, incentive agreements, and website domains totaled $16,486,277. The accumulated amortization was ($7,670,262). The net value is derived by subtracting the accumulated amortization from the gross value.
It is important to note that the value of intangible assets can fluctuate and is subject to accounting practices like amortization. Prospective franchisees should consider how these assets contribute to the brand's strength and market position, and how changes in their value might impact the company's financial health.