What was the depreciation expense for Monicals Pizza for the year ending December 31, 2022?

According to Monicals Pizza's 2025 Franchise Disclosure Document, the depreciation expense for the years ending December 31, 2023 and 2022 was reported. The depreciation expense for the year ending December 31, 2022, was $1,177,751.

Depreciation expense represents the allocation of the cost of tangible assets, like buildings and equipment, over their useful lives. This accounting practice reflects the wear and tear or obsolescence of these assets. For a Monicals Pizza franchisee, understanding depreciation is crucial because it impacts the profitability of the business. Higher depreciation expenses can reduce taxable income, potentially lowering income tax obligations.

Franchisees should consider depreciation when evaluating the financial performance of their Monicals Pizza restaurant. It is a non-cash expense, meaning it doesn't involve an actual outflow of cash, but it does affect the net income reported on the income statement. Reviewing depreciation trends over several years can provide insights into the age and condition of the assets and may signal the need for future capital expenditures to replace or upgrade equipment.