What was the depreciation expense for Crepe De Licious for the year ended December 31, 2024?
Crepe_De_Licious Franchise · 2025 FDDAnswer from 2025 FDD Document
ast. As a result, management has individually assessed these balances for an allowance for credit losses as of December 31, 2023. During 2024, the accounts receivables were written off against the allowance.
The Company will write-off receivables when there is information that indicates the debtor is facing significant financial difficulty and there is no possibility of recovery. If any recoveries are made from any accounts previously written off, they will b
Source: Item 23 — RECEIPTS (FDD pages 57–233)
What This Means (2025 FDD)
According to Crepe De Licious's 2025 Franchise Disclosure Document, the depreciation expense for the year ended December 31, 2024, was $37,586. This figure reflects the reduction in value of the company's assets, such as furniture, equipment, and software, over that year. These assets are depreciated using straight-line methods over their estimated useful lives, which are five years for furniture, equipment, and software, and the lease term for leasehold improvements.
For a prospective Crepe De Licious franchisee, understanding the depreciation expense is crucial for assessing the company's financial health and profitability. It provides insight into how the company manages its assets and accounts for their wear and tear. While this is a backward-looking expense for the franchisor, franchisees can expect to incur similar depreciation expenses on their own equipment and leasehold improvements.
It's important to note that depreciation is a non-cash expense, meaning it doesn't involve an actual outflow of cash. However, it does reduce the company's taxable income, which can result in tax savings. The FDD also mentions that maintenance and repairs are charged to operations, while major renewals and improvements are capitalized, indicating how Crepe De Licious accounts for expenditures related to its assets.
Franchisees should consider these accounting practices when evaluating their own potential expenses and profitability. Understanding how depreciation is calculated and reported can help franchisees make informed decisions about asset management and financial planning for their own Crepe De Licious locations.