What was the depreciation expense for Jersey Mikes for the year ended December 31, 2022?
Jersey_Mikes Franchise · 2025 FDDAnswer from 2025 FDD Document
| 2024 | 2023 | |
|---|---|---|
| Land | $ 328,333 | $ 328,333 |
| Buildings | 4,031,351 | 4,031,351 |
| Office furniture and fixtures | 5,171,310 | 4,051,398 |
| Leasehold improvements | 7,625,601 | 5,598,603 |
| Machinery and equipment | 2,642,259 | 2,242,259 |
| Vehicles | 141,354 | 69,302 |
| Aircraft | 41,744,200 | 41,744,200 |
| Construction in progress | 44,266 | 44,266 |
| Construction in progress—aircraft | 41,000,000 | - |
| Property and equipment | 102,728,674 | 58,109,712 |
| Less accumulated depreciation | 12,995,155 | 10,635,405 |
| Property and equipment—net | $ 89,733,519 | $ 47,474,307 |
Depreciation expense amounted to $3,030,354, $2,664,005, and $2,318,012 for the years ended December 31, 2024, 2023, and 2022, respectively.
The estimation of residual value of the aircraft requires the Company to make assumptions regarding the age and number of flight hours at the time of disposal along with the expected used aircraft market. The Company annually evaluates the estimated residual values and adjusts depreciation, as appropriate. Any difference between the actual residual
Source: Item 22 — CONTRACTS (FDD page 77)
What This Means (2025 FDD)
According to Jersey Mikes' 2025 Franchise Disclosure Document, the depreciation expense for the years ended December 31, 2024, 2023, and 2022 is detailed in the notes to the consolidated financial statements. For the year ended December 31, 2022, the depreciation expense amounted to $2,318,012.
Depreciation expense is a non-cash expense that reflects the reduction in value of an asset over time. This figure is important for understanding the overall financial health of Jersey Mikes, as it represents the cost of using assets like equipment and buildings. For a franchisee, understanding the depreciation expense can provide insight into the capital investments Jersey Mikes has made and how these assets are being managed.
It's also worth noting that the company's estimation of residual value of the aircraft requires the Company to make assumptions regarding the age and number of flight hours at the time of disposal along with the expected used aircraft market. The Company annually evaluates the estimated residual values and adjusts depreciation, as appropriate. Any difference between the actual residual value and the estimated residual value is recorded as part of depreciation, will be recorded as a gain or loss at time of any actual sale. For the years ended December 31, 2024 and 2023, there was no adjustment necessary to the residual value.