What is the accumulated amortization for agreements with franchisees for Sonesta Select Sonesta Essential?
Sonesta_Select_Sonesta_Essential Franchise · 2025 FDDAnswer from 2025 FDD Document
tion impact of sold assets was $0.4 million.
5. Intangible Assets, net
At December 31, 2024 and 2023, our intangible assets were as follows (in thousands):
| Asset Description | Cost | umulated | Net | |
|---|---|---|---|---|
| ortization | ||||
| Amortizable intangible assets: | ||||
| Agreements with franchisees | $ 5,184 | $ | (902) | $ 4,282 |
| Carrying value of brand names (finite lives) | 200 | (128) | 72 | |
| Total amortizable intangible assets | 5,384 | (1,030) | 4,354 | |
| Carrying value of brand names (indefinite lives) | 16,530 | 16,530 | ||
| Intangible assets, net | $ 21,914 | $ | (1,030) | $ 20,884 |
| Asset Description | Cost | ımulated | Net | |
| -------------------------------------------------- | ----------- | ------- | ----------------------- | -------------- |
| rtization | ||||
| Amortizable intangible assets: | ||||
| Agreements with franchisees | $ 5,184 | $ | (666) | $ 4,518 |
| Carrying value of brand names (finite lives) | 200 | (94) | 106 | |
| Total amortizable intangible assets |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 84)
What This Means (2025 FDD)
According to Sonesta Select Sonesta Essential's 2025 Franchise Disclosure Document, the accumulated amortization for agreements with franchisees is detailed in the financial statements. As of December 31, 2024, the accumulated amortization for agreements with franchisees was $902,000. For the period ending December 31, 2023, the accumulated amortization totaled $666,000. These figures reflect the reduction in value of the franchise agreements over time, as recognized by Sonesta Select Sonesta Essential for accounting purposes.
These amortized amounts are part of the broader category of amortizable intangible assets, which also includes brand names with finite lives. The total amortizable intangible assets, including agreements with franchisees and brand names, had accumulated amortization of $1,030,000 as of December 31, 2024, and $760,000 as of December 31, 2023. The net values of these assets, after deducting accumulated amortization, were $4,354,000 and $4,624,000 for 2024 and 2023, respectively.
For a prospective Sonesta Select Sonesta Essential franchisee, understanding these figures is crucial for assessing the financial health and accounting practices of the franchisor. Amortization is a non-cash expense, but it reflects the consumption of the economic benefits associated with the franchise agreements. Reviewing these figures over time can provide insights into how Sonesta Select Sonesta Essential manages and values its intangible assets, which are a significant part of its franchise operations. Franchisees may want to discuss with Sonesta Select Sonesta Essential how these figures impact the overall financial strategy and stability of the franchise system.