What was the depreciation expense for Black Bear Diner for the year ended December 25, 2024?

According to Black Bear Diner's 2025 Franchise Disclosure Document, the depreciation expense for the year ended December 25, 2024, was $118,463. In the preceding year, which ended on December 27, 2023, the depreciation expense was $86,353.

Depreciation expense represents the reduction in value of an asset over time, typically due to wear and tear or obsolescence. This accounting practice allows Black Bear Diner to spread the cost of assets like equipment and buildings over their useful lives, rather than expensing the entire cost in the year of purchase. For a franchisee, understanding depreciation is important because it affects the reported profitability of the business. Higher depreciation expenses can reduce taxable income, but they also reflect the ongoing cost of maintaining and replacing assets.

The increase in depreciation expense from 2023 to 2024 suggests that Black Bear Diner may have acquired new assets or that existing assets are being depreciated at a faster rate. Prospective franchisees should inquire about the specific assets being depreciated and the methods used to calculate depreciation. This information can help them forecast future capital expenditures and understand the long-term financial health of their franchise.

It's important to note that depreciation is a non-cash expense, meaning it does not involve an actual outflow of cash. However, it does impact the net income reported on the income statement. Franchisees should consider depreciation expense when evaluating the overall financial performance of their Black Bear Diner location and planning for future investments in their business.