What was the depreciation and amortization expense for Circle K in the middle year reported?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
| Revenues: | |||
|---|---|---|---|
| Initial franchise sales | $ 1,036,157 | $ 1,030,058 | $ 1,076,538 |
| Royalty and promotional fees | 59,421,781 | 60,722,633 | 63,929,364 |
| Fuel sales, net | 4,205,466 | 2,723,519 | 2,044,397 |
| Interest and other income | 6,503,683 | 5,867,604 | 4,357,577 |
| Total Revenues | 71,167,087 | 70,343,814 | 71,407,876 |
| Expenses: | |||
| Selling, general, and administrative expenses | 37,295,957 | 36,565,205 | 33,600,199 |
| Trademark expense | 391,871 | 408,796 | 447,750 |
| Depreciation and amortization expense | 7,776,052 | 8,959,374 | 8,449,524 |
| Total Expenses | 45,463,880 | 45,933,375 | 42,497,473 |
| (Loss) Gain on Disposals and Terminations | (7,610) | (1,541,825) | 38,139 |
| Income before income taxes | 25,695,597 | 22,868,614 | 28,948,542 |
| Provision for income taxes | 6,607,382 | 7,582,373 | 7,547,431 |
| Net Income and Comprehensive Income | $ 19,088,215 | $ 15,286,241 | $ 21,401,111 |
Source: Item 23 — RECEIPTS (FDD pages 100–359)
What This Means (2025 FDD)
According to Circle K's 2025 Franchise Disclosure Document, the depreciation and amortization expense for the middle year reported was $8,959,374. This figure represents the expense recorded for the allocation of the cost of tangible assets (depreciation) and intangible assets (amortization) over their useful lives.
For a prospective Circle K franchisee, understanding depreciation and amortization is crucial for assessing the overall financial health and profitability of the franchise. These expenses, while non-cash, reflect the wearing out or obsolescence of assets used in the business. Higher depreciation and amortization expenses can impact the net income, potentially reducing the amount available for distribution or reinvestment.
Reviewing these expenses over the three years provided in the FDD helps in identifying trends. In this case, the depreciation and amortization expense fluctuates, suggesting varying levels of capital investment or changes in asset values. Franchisees should consider these factors when projecting their own potential expenses and profitability.
It's important for potential franchisees to discuss these figures with a financial advisor to understand the implications for their specific circumstances and to factor these non-cash expenses into their financial planning and operational strategies for their Circle K franchise.