What is the intangibles subject to amortization value for Gold Star Chili, Inc.?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
| Gold Star Chili, Inc. | Properties, LLC | TCWW, LLC | Eliminations | _ | Total | ||
|---|---|---|---|---|---|---|---|
| Current Assets | |||||||
| Cash | $ | 437,267 | $ 909,375 | $ 244,320 | $ - | $ | 1,590,962 |
| Accounts Receivable, Less Allowance for | ,, | ||||||
| Expected Credit Losses of $896,732 | 905,238 | 2,002,485 | 4,130 | (1,981,263) | 930,590 | ||
| Advance - Related Party | 3,441,832 | - | - | (3,441,832) | - | ||
| Other Receivables | 21,704 | - | 1,502 | - | 23,206 | ||
| Inventory | 980,151 | - | 27,923 | - | 1,008,074 | ||
| Prepaid Expenses | 166,348 | 109,041 | 15,154 | (12,824) | _ | 277,719 | |
| Total Current Assets | 5,952,540 | 3,020,901 | 293,029 | (5,435,919) | _ | 3,830,551 | |
| Property and Equipment | |||||||
| Land | - | 7,004,518 | - | (164,029) | 6,840,489 | ||
| Buildings | 4,127,417 | 10,257,116 | - | 817,551 | 15,202,084 | ||
| Leasehold Improvements | 5,500,864 | - | 429,641 | - | 5,930,505 | ||
| Furniture and Equipment | 5,913,212 | 184,794 | 535,932 | - | 6,633,938 | ||
| Vehicles | 100,623 | - | - | - | 100,623 | ||
| Construction in Progress | _ | 489,000 | - | - | . - | _ | 489,000 |
| 1 | 6,131,116 | 17,446,428 | 965,573 | 653,522 | 35,196,639 | ||
| Less Accumulated Depreciation | 9,164,879 | 6,837,663 | 291,152 | 727,229 | _ | 17,020,923 | |
| Total Property and Equipment | 6,966,237 | 10,608,765 | 674,421 | (73,707) | _ | 18,175,716 | |
| Fair Value of Interest Rate Swap | 194,930 | 113,503 | - | . - | _ | 308,433 | |
| Other Assets | |||||||
| Right of Use Asset - Operating Leases | 9,246,018 | _ | 1,846,237 | _ | 11,092,255 | ||
| Goodwill, Net | 381,667 | _ | 67,719 | - | 449,386 | ||
| Trademark | - | _ | 475,000 | _ | 475,000 |
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, the trademark value is $475,000 as of December 31, 2024. This intangible asset is subject to amortization.
For a prospective Gold Star franchisee, understanding the valuation and treatment of intangible assets like trademarks is crucial. Amortization is the process of expensing the cost of an intangible asset over its useful life. This accounting practice affects the company's reported profits and tax liabilities. The trademark is a key component of the Gold Star brand, and its value reflects the recognition and reputation the brand has established.
The FDD indicates that Gold Star's financial statements are prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP), which dictates how intangible assets like trademarks are valued and amortized. The allocation of value to the trademark suggests that Gold Star recognizes the importance of its brand in its overall business operations. A franchisee benefits from the established trademark through brand recognition and customer loyalty.
It's important for potential franchisees to note that while the trademark has a recorded value, its real value lies in its ability to attract and retain customers. The amortization of the trademark is an accounting mechanism and does not diminish the actual value of the brand. Franchisees should focus on maintaining and enhancing the brand's reputation through excellent service and quality products.