What was the depreciation expense incurred by Annex Brands during the year 2022?

According to Annex Brands' 2025 Franchise Disclosure Document, the company's depreciation expense for the year 2022 was $507,000. This figure represents the accounting expense recognized by Annex Brands for the reduction in value of its assets, such as equipment and leasehold improvements, due to wear and tear, obsolescence, or other factors. Depreciation is a non-cash expense that reflects the allocation of the cost of an asset over its useful life.

For a prospective Annex Brands franchisee, understanding the franchisor's depreciation expense can provide insights into the capital investments made by the company in its infrastructure and equipment. While this expense does not directly impact the franchisee's operations, it is an indicator of the company's financial management and asset utilization strategies. A consistent depreciation expense may suggest stable asset management practices.

It's important to note that depreciation methods and useful lives of assets can vary, impacting the reported expense. Annex Brands calculates depreciation on equipment using the straight-line method over an estimated useful life of two to seven years. The amortization of leasehold improvements is computed using the straight-line method over the shorter of the lease term or the estimated useful life of the asset. Franchisees should focus more on their own potential depreciation expenses related to their own assets acquired for their specific franchise location.