What was the amount of Broker Fees paid by Gold Star in 2023?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
Broker fees associated with the purchase of a building are capitalized and are amortized over the life of the lease using the straight-line method. Design fees associated with a rebranding, which included uniform designs, remodeling designs, and website development costs, are capitalized and amortized over ten years. During the years ended December 31, 2024, 2023, and 2022, the Company determined that, based on their studies, no impairment of broker or design fees existed.
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, broker fees associated with the purchase of a building are capitalized and amortized over the life of the lease using the straight-line method. The FDD states that during the years ended December 31, 2024, 2023, and 2022, the Company determined that, based on their studies, no impairment of broker or design fees existed.
This accounting treatment means that Gold Star spreads the cost of broker fees over the lease term rather than expensing them immediately. For a prospective franchisee, this indicates that Gold Star invests in long-term assets and follows standard accounting practices for these types of expenses. The lack of impairment suggests that the value of these capitalized costs has not diminished, reflecting stable business operations.
However, the excerpt does not specify the exact dollar amount of broker fees paid by Gold Star in 2023. To get this information, a prospective franchisee should ask Gold Star for a detailed breakdown of broker fees paid in 2023, including the specific buildings or leases to which these fees relate. Understanding these costs can help a franchisee assess the financial health and investment strategies of Gold Star.