Where are the accounting policies related to intangible assets for Nothing Bundt Cakes disclosed?
Nothing_Bundt_Cakes Franchise · 2025 FDDAnswer from 2025 FDD Document
| Fiscal year Ended | |||
|---|---|---|---|
| December 29, 2024 | December 31, 2023 | ||
| Cash flows from operating activities: | |||
| Net income | $ 29,103 | $ | 16,805 |
| Adjustments to reconcile net income to net cash provided by | |||
| operating activities: | |||
| Amortization of intangible assets | 14,759 | 15,043 | |
| Amortization of off-market agreement liability | (368) | (368) | |
| Changes in assets and liabilities: | |||
| Accounts receivable | (815) | 528 | |
| Prepaid expenses | (398) | (429) | |
| Accounts payable | - | (14) | |
| Deferred revenue | 4,332 | 4,850 | |
| Other liabilities | (7) | 84 | |
| Net cash provided by operating activities | $ 46,606 | $ | 36,499 |
| Cash flows from financing activities: | |||
| Proceeds (to) from related parties | $ 12 | $ | - |
| Distributions | (46,357) | (35,890) | |
| Net cash used in financing activities | $ (46,345) | $ | (35,890) |
| Net increase in cash and cash equivalents | 261 | 609 | |
| Cash and cash equivalents, beginning of period | 1,637 | 1,028 | |
| Cash and cash equivalents, end of period | 1,898 | 1,637 | |
NBC Franchisor LLC NOTES TO THE FINANCIAL STATEMENTS
1. Nature of Business
NBC Franchisor LLC (the "Company"), a special purpose Delaware limited liability company, was organized on June 14, 2021. The Company is a direct, wholly owned subsidiary of NBC Funding LLC (the "Debt Issuer"), which is a special purpose Delaware limited liability company that is a direct, wholly owned subsidiary of NBC SPV Guarantor LLC and an indirect, wholly owned subsidiary of NBC Holdings, LLC ("Parent").
The Company was formed in connection with a financing transaction (the "Securitization Transaction"), which was completed on July 30, 2021 (see Note 4), and serves as the "franchisor" of the Nothing Bundt Cakes brand and owns all Franchise Assets, which includes all franchise agreements and intellectual property related to the business. The Company grants the rights to own and operate Nothing Bundt Cakes bakeries, which specialize in selling decorated bundt cakes and other related gift items. The Company grants each franchisee a transferable right and license to use the "System," the proprietary marks, and to market, sell, and provide the approved products in accordance with the System. The System consists of certain trademarks, service marks, and commercial symbols, including the mark "Nothing Bundt Cakes," certain bakery design décor and images, all of which the Company may modify from time to time.
Source: Item 23 — RECEIPTS (FDD pages 93–309)
What This Means (2025 FDD)
According to the 2025 Nothing Bundt Cakes FDD, the accounting policies are disclosed in the notes to the financial statements. Specifically, Note 2, titled "Summary of Significant Accounting Policies," provides information on the basis of accounting, which adheres to accounting principles generally accepted in the United States of America (GAAP).
Furthermore, the unaudited statement of operations for the period of December 30, 2024, through March 30, 2025, includes a line item for "Depreciation and amortization" amounting to $3,689,863. This indicates that Nothing Bundt Cakes recognizes and accounts for the depreciation and amortization of its assets, which may include intangible assets. However, the FDD excerpt does not provide specific details on the policies related to intangible assets.
While the excerpt confirms the use of GAAP and reports depreciation and amortization expenses, it lacks detailed information on the specific accounting policies for intangible assets. A prospective franchisee should inquire with Nothing Bundt Cakes about the specific policies and procedures used to account for intangible assets, including how they are valued, amortized, and impaired.