What was the depreciation amount for Bath Tune Up for the year ended December 31, 2023?
Bath_Tune_Up Franchise · 2025 FDDAnswer from 2025 FDD Document
mber 31, 2024 | $ 13,383,394 | $ (9,281,090) $ | 4,102,304 |
HFC KTU LLC (dba Kitchen Tune-Up and Bath Tune-Up) Statements of Cash Flows
| For the Years Ended | ||||
|---|---|---|---|---|
| December 31, 2024 | December 31, 2023 | |||
| Cash flows from operating activities: | ||||
| Net income | $ | 1,588,884 | $ | 2,271,476 |
| Adjustments to reconcile Net income to Net cash provided by | ||||
| operating activities | ||||
| Depreciation | 277,279 | 211,930 | ||
| Amortization of operating right-of-use lease assets | 55,233 | 53,752 | ||
| Provision for credit losses | 894,504 | 630,961 | ||
| Loss on disposal of assets | — | 3,651 | ||
| Foreign exchange (gain) loss | 15,613 | (9,062) | ||
| Decrease (increase) in assets: | ||||
| Accounts receivable | (254,306) | (272,177) | ||
| Notes receivable | (224,976) | (460,630) | ||
| Rebates receivable | 73,413 | 129,675 | ||
| Prepaid expenses | 5,025 | 109,994 | ||
| Other current assets | 11,379 | 10,096 | ||
| Other assets | (4,000) | — | ||
| Increase (decrease) in liabilities: | ||||
| Accounts payable | 312,705 | (155,708) | ||
| Accrued liabilities | (39,319) | 33,690 | ||
| Operating lease liability | (57,206) | (59,809) | ||
| Advertising advances and deposits | (146,679) | (196,847) | ||
| Deferred revenue | 27,529 | (513,538) | ||
| Net cash provided by operating activities | 2,535,078 | 1,787,454 | ||
| Cash flows from investing activities: | ||||
| Purchase of property and equipment | (174,417) | (214,252) | ||
| Net cash used in investing activities | (174,417) | (214,252) | ||
| Cash flows from financing activities: | ||||
| Advances to Parent | (5,616,409) | (5,067,710) | ||
| Allocations from Parent | 3,716,061 | 3,671,090 | ||
| Net cash used in financing activities | (1,900,348) | (1,396,620) | ||
| Net increase in cash | 460,313 | 176,582 | ||
| Cash at beginning of period | 1,838,918 | 1,662,336 | ||
| Cash at end of period | $ | 2,299,231 | $ | 1,838,918 |
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 51–52)
What This Means (2025 FDD)
According to Bath Tune-Up's 2025 Franchise Disclosure Document, the depreciation expense for the year ending December 31, 2023, was $211,930. This figure is part of the adjustments made to reconcile net income to net cash provided by operating activities. Depreciation is a non-cash expense that reflects the reduction in value of assets over time.
For a prospective Bath Tune-Up franchisee, understanding depreciation is crucial for assessing the true profitability and cash flow of the business. While depreciation doesn't represent an actual cash outflow, it does reduce the company's taxable income, which can lower income tax obligations. This can impact the overall financial performance of the franchise.
It's important to note that depreciation is just one of several adjustments listed. Other adjustments include amortization of operating right-of-use lease assets ($53,752), provision for credit losses ($630,961), and loss on disposal of assets ($3,651). These adjustments collectively provide a more accurate picture of the company's cash flow from operations, which was $1,787,454 for the year ended December 31, 2023.
Franchisees should carefully review the financial statements and related notes to understand how depreciation and other non-cash expenses impact the overall financial health of Bath Tune-Up. Consulting with a financial advisor is recommended to fully grasp the implications of these figures for their investment.