What was the gross value of Management Recruiters' purchased software as of December 31, 2022?
Management_Recruiters Franchise · 2024 FDDAnswer from 2024 FDD Document
ars ended December 31, 2022 and December 31, 2021, respectively.
Note 10 – Intangible Assets
The following table reflects our intangible assets (in thousands except useful life):
| December 31, 2022 | December 31, 2021 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Estimated useful life (in years) | Gross | Accumulated amortization Net | Gross | Accumulated amortization | Net | |||||
| Finite-lived intangible assets: | ||||||||||
| Franchise agreements | 15 | $ | 25,556 | $ | (2,413) | $ | 23,144 | $ 19,916 | $ (1,068) $ | 18,848 |
| Customer lists | 10 | - | - | - | 227 | (227) | - | |||
| Purchased software | 7 | 3,200 | (571) | 2,629 | 3,200 | (114) | 3,086 | |||
| Internally developed software | 5 | 2,294 | (38) | 2,256 | 916 | - | 916 | |||
| Total finite-lived intangible assets | $ | 31,050 | $ | (3,022) | $ | 28,028 | $ 24,259 | $ (1,409) $ | 22,850 | |
| Indefinite-lived intangible assets: | ||||||||||
| Domain name | Indefinite | $ | 2,226 |
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 65–66)
What This Means (2024 FDD)
According to Management Recruiters' 2024 Franchise Disclosure Document, the gross value of purchased software as of December 31, 2022, was $3,200. This software has an estimated useful life of 7 years. The accumulated amortization for this software was $571, resulting in a net value of $2,629.
This information is relevant to potential franchisees as it provides insight into the assets Management Recruiters owns and utilizes in its operations. The purchased software is a finite-lived intangible asset, meaning its value is amortized over its useful life. Amortization is the process of gradually writing off the initial cost of an asset.
The difference between the gross value and the net value (after accumulated amortization) indicates how much of the software's value has already been recognized as an expense. This can help a franchisee understand the remaining economic benefit Management Recruiters expects to derive from the software. The fact that Management Recruiters itemizes and tracks these assets suggests a level of sophistication in their financial reporting and asset management.
Prospective franchisees should consider the role this software plays in the franchise operations and how it contributes to the services provided to clients. Understanding the types of software used and their importance can help in evaluating the overall value and efficiency of the Management Recruiters franchise system.