For Springhill Suites By Marriott, are the statements of income included in the financial statements?
Springhill_Suites_By_Marriott Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 17: , "Renewal, Termination, Transfer, and Dispute Resolution," is amended by the addition of the following paragraph(s) at the conclusion of the Item:]
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 acquired intangible assets on a straight-line basis over the remaining term of the underlying agreements and record the expense in the "Amortization and depreciation expense" caption of our Income Statements. The Company derecognized the carrying amount of all previously capitalized costs incurred to obtain these contracts of $3,105. For these acquired definite-lived intangible assets, our estimated aggregate amortization expense for each of the next five fiscal years through December 31, 2029, will be approximately $67.
MIF, L.L.C. Notes to Financial Statements (continued) ($ in Thousands)
4. Subsequent Events
The Company has evaluated subsequent events for recognition and disclosure through March 26, 2025, the date of these financial statements and determined there were no recognized or unrecognized events that would require an adjustment or additional disclosure as of December 31, 2024.
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 137–138)
What This Means (2025 FDD)
According to the 2025 Springhill Suites By Marriott Franchise Disclosure Document, the franchise agreement costs that Marriott incurs are recorded within the "Intangible assets, net" section of their Balance Sheets. These costs are then amortized over a period of 10 to 30 years. The amortization is reflected in the "Contract investment amortization" and "Cost reimbursement revenue" captions of their Income Statements.
In 2019, Marriott recorded $1,764 in intangible assets related to its Parent's acquisition of its partner's remaining interest in a joint venture, with the franchise contracts having a weighted-average term of 24 years. The acquired intangible assets are amortized on a straight-line basis over the remaining term of the agreements, with the expense recorded in the "Amortization and depreciation expense" caption of their Income Statements. The company derecognized $3,105 of previously capitalized costs incurred to obtain these contracts.
For the next five fiscal years through December 31, 2029, the estimated aggregate amortization expense for these acquired definite-lived intangible assets will be approximately $67. Additionally, the company evaluated subsequent events through March 26, 2025, and determined there were no events requiring adjustment or additional disclosure as of December 31, 2024.