What were the costs incurred by Springhill Suites By Marriott to obtain contracts with customers in 2023?
Springhill_Suites_By_Marriott Franchise · 2025 FDDAnswer from 2025 FDD Document
s:
| 2024 | 2023 | |
|---|---|---|
| Costs incurred to obtain contracts with customers | $ 31,016 | $ 30,858 |
| Other contract intangibles | 1,764 | 1,764 |
| $ 32,780 | $ 32,622 | |
| Accumulated amortization | (11,143) | (9,782) |
| $ 21,637 | $ 22,840 |
We capitalize only incremental costs that Marriott incurs on our behalf to acquire franchise and license agreements, which we reimburse through a related party payable. We record these costs incurred to obtain contracts with customers within the "Intangible assets, net" caption of our Balance Sheets. We amortize these costs on a straight-line basis over the initial term of the underlying agreements, ranging from 10 to 30 years, in the "Contract investment amortization" and "Cost reimbursement revenue" captions of our Income Statements.
In 2019, the Company recorded intangible assets of $1,764 related to its Parent's acquisition of its partner's remaining interest in a joint venture. The related franchise contracts have a weightedaverage term of 24 years. We amortize the acqui
Source: Item 17 — , "Renewal, Termination, Transfer, and Dispute Resolution," is amended by the addition of the following paragraph(s) at the conclusion of the Item: (FDD pages 285–553)
What This Means (2025 FDD)
According to the 2025 Springhill Suites By Marriott Franchise Disclosure Document, Marriott capitalizes the incremental costs incurred on their behalf to acquire franchise and license agreements, which are then reimbursed through a related party payable. These costs are recorded as "Intangible assets, net" on the balance sheets and amortized on a straight-line basis over the initial term of the agreements, which range from 10 to 30 years. The amortization is reflected in the "Contract investment amortization" and "Cost reimbursement revenue" captions of the income statements.
The FDD also mentions that in 2019, the company recorded intangible assets of $1,764 (in thousands) related to its Parent's acquisition of its partner's remaining interest in a joint venture, with the related franchise contracts having a weighted-average term of 24 years. These acquired intangible assets are amortized on a straight-line basis over the remaining term of the underlying agreements, with the expense recorded in the "Amortization and depreciation expense" caption of the income statements. The company derecognized previously capitalized costs of $3,105 (in thousands) incurred to obtain these contracts.
While the document describes the accounting treatment and amortization of these costs, it does not explicitly state the specific dollar amount of costs incurred to obtain contracts with customers during the year 2023. A prospective franchisee should inquire directly with Springhill Suites By Marriott about the specific costs incurred in 2023 to gain a clearer understanding of these expenses.