What was the reported value of Jersey Mikes' aircraft assets in 2023?
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)
Based on the 2025 Franchise Disclosure Document, specific details regarding the value of Jersey Mike's aircraft assets are not disclosed. However, the FDD does mention that 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. For the years ended December 31, 2024 and 2023, there was no adjustment necessary to the residual value.
While the FDD does not provide the exact value of the aircraft assets, it does state that depreciation expense amounted to $2,664,005 for the year ended December 31, 2023. Depreciation is related to the aircraft assets. The FDD also mentions that any difference between the actual residual value and the estimated residual value is recorded as part of depreciation, and will be recorded as a gain or loss at time of any actual sale.
As a prospective franchisee, it would be prudent to ask Jersey Mike's for more detailed information about their aircraft assets, including their total valuation, depreciation methods, and any potential liabilities associated with these assets. Understanding these details can help you assess the financial stability and practices of the company.