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Intangible Assets:

12 Months Ended

Dec. 31, 2022

Intangible Assets

Intangible Assets

5. Intangible Assets:

In June 2022, Winmark terminated an agreement that contained the rights for eleven Play It Again Sports stores to operate separately from Winmark’s franchise system. In terminating the agreement, which included $3.54 million of consideration paid by Winmark, Winmark reacquired the franchise rights to these eleven stores. Upon termination of the agreement, individual franchise agreements were signed for these eleven stores, each with an initial term of ten years.

Intangible assets consist of these reacquired franchise rights. The Company amortizes the fair value of the reacquired franchise rights over the contract term of the franchise. The Company recognized $191,700 of amortization expense for the year ended December 31, 2022.

Intangible assets consist of the following:


		December 31, 2022
Reacquired franchise rights		$	3,540,000
Accumulated amortization			(191,700)
		$	3,348,300

The following table illustrates future amortization to be expensed for the next five fiscal years and fiscal years thereafter related to reacquired franchise rights as of December 31, 2022.


Amortization expected to be expensed in		Amount
2023		$	354,000
2024			354,000
2025			354,000
2026			354,000
2027			354,000
Thereafter			1,578,300
		$	3,348,300