What was the depreciation and amortization amount for 7 Brew as of December 25, 2022?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
ber 29, 2024 | $ 17,776,440 |
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| December 29, 2024 | December 31, 2023 | December 25, 2022 | |
|---|---|---|---|
| Operating Activities | $ 18,388,782 | $ 1,560,891 | $ (2,563,076) |
| Net income (loss) | |||
| Adjustments to reconcile net income (loss) to net cash | |||
| provided by operating activities Depreciation and amortization Operating lease asset/liability Loss on disposal of software in development Gift card breakage | 55,238 12,550 693,200 (1,485,646) | 19,643 35,666 - - | 9,407 - - - |
| Changes in Accounts receivable Prepaid expenses and other current assets Accounts payable and accrued expenses Deferred franchise fees | (848,299) (1,600,294) 5,954,321 4,428,639 | (135,935) (176,538) 2,074,593 8,509,758 | (537,588) (43,392) 1,878,039 9,312,180 |
| Net cash provided by operating activities | 25,598,491 | 11,888,078 | 8,055,570 |
| Investing Activities Purchase of property and equipment Advances to Parent Net cash used in investing activities | (941,616) (3,949,623) (4,891,239) | (421,290) (12,999,978) (13,421,268) | (60,581) (13,593,164) (13,653,745) |
| Increase (Decrease) in Cash | 20,707,252 | (1,533,190) | (5,598,175) |
| Cash, Beginning of Period | 2,111,088 | 3,644,278 | 9,242,453 |
| Cash, End of Period | $ 22,818,340 | $ 2,111,088 | $ 3,644,278 |
| Supplemental Non-Cash Activities Right-of-use asset obtained in exchange for new operating lease liability Accounts payable and accrued expenses relating to purchases of f |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 82)
What This Means (2025 FDD)
According to 7 Brew's 2025 Franchise Disclosure Document, the depreciation and amortization for the year ending December 25, 2022, was $9,407. This figure reflects the reduction in value of 7 Brew's tangible and intangible assets over that period. Depreciation specifically accounts for the wear and tear of physical assets like equipment, while amortization covers the cost allocation of intangible assets such as software.
For a prospective franchisee, understanding depreciation and amortization is crucial because it impacts the company's overall financial health and profitability. While this number itself is small, it is important to note that the company was newer at this time. These expenses are part of the broader picture of operating activities, which shows a net loss of $2,563,076 for the same period. This net loss is then adjusted to reconcile to net cash, which is a common accounting practice.
It's important to note that depreciation and amortization are non-cash expenses, meaning they don't represent actual cash outflows. Instead, they reflect the allocation of the cost of assets over their useful lives. Reviewing these figures in conjunction with other financial statement items provides a more complete understanding of 7 Brew's financial performance and how it manages its assets.
Franchisees should consider these figures in the context of 7 Brew's growth trajectory and investment in long-term assets. A growing franchise system may see increasing depreciation and amortization expenses as it invests in infrastructure and technology to support its expanding operations. Therefore, it is important to compare these figures over multiple years to identify trends and assess the company's financial strategy.