What was the depreciation expense for Chesters for the year ended December 31, 2023?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
| 2024 | 2023 | |
|---|---|---|
| Furniture and equipment | $ 536,084 | $ 533,910 |
| Leasehold improvements | 1,057,728 | 214,927 |
| Vehicles | 40,000 | 53,165 |
| Construction-in-progress | - | 478,828 |
| Less accumulated depreciation | 1,633,812 | 1,280,830 |
| (533,730) | (402,180) | |
| $ 1,100,082 | $ 878,650 |
Depreciation expe
Source: Item 21 — **FINANCIAL STATEMENTS (FDD page 48)
What This Means (2025 FDD)
According to Chesters's 2025 Franchise Disclosure Document, the depreciation expense for the years ended December 31, 2024 and 2023, was $169,673 and $49,343, respectively. This indicates that Chesters's depreciation expense for the year ended December 31, 2023, was $49,343.
Depreciation expense represents the allocation of the cost of tangible assets, such as property and equipment, over their useful lives. This accounting practice reflects the gradual decline in the value of these assets as they are used in Chesters's operations. For a prospective franchisee, understanding the depreciation expense can provide insights into the capital investments Chesters has made in its infrastructure and equipment.
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 reduce Chesters's taxable income, which can result in tax savings. Franchisees should consider depreciation expense when evaluating the overall financial performance of Chesters, as it can impact profitability and cash flow.