What was the net value of agreements with franchisees for Sonesta Simply Suites as of December 31, 2023?
Sonesta_Simply_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
-----------|--| | | 1100 | | | | | | | )2) $ | 4,282 | | | 28) | 72 | | | 30) | 4,354 16,530 | | | 30) $ | 20,884 | | | )( | 002) $ 28) 030) $ | | | )(3 | | | | | December 31, 2023 | | | | | | | | | | |--------------------------------------------------|-------------------|----|-----------|-----|--------|--|--|--|--|--| | Anna Dana tata | Cont | | ımulated | | | | | | | | | Asset Description | Cost Amortizat
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 79)
What This Means (2025 FDD)
According to Sonesta Simply Suites's 2025 Franchise Disclosure Document, the net value of agreements with franchisees as of December 31, 2023, was $4,518. This figure represents the initial cost of these agreements ($5,184) less accumulated amortization ($666). These values are part of the amortizable intangible assets reported in the financial statements.
For a prospective Sonesta Simply Suites franchisee, this indicates the financial value the company places on its franchise agreements. The initial cost of $5,184 represents the capital investment Sonesta Simply Suites has made in establishing and securing these franchise relationships. The amortization of $666 reflects the systematic reduction of this initial cost over the life of the agreements, recognizing the declining value of these assets as time passes.
The net value of $4,518 is an accounting measure that reflects the remaining economic benefit Sonesta Simply Suites expects to derive from these franchise agreements. This figure is relevant for understanding the company's asset valuation and financial health. It's important to note that this value does not directly translate into cash flow for the franchisee but rather represents the franchisor's perspective on the value of its franchise network.
It is important for potential franchisees to understand how the franchisor values its intangible assets, as this can influence decisions related to franchise support, development, and overall network strategy. While this specific figure may not directly impact day-to-day operations, it provides insight into the financial management and long-term planning of Sonesta Simply Suites.