What was the depreciation and amortization expense for Precision Door Service in 2023?
Precision_Door_Service Franchise · 2025 FDDAnswer from 2025 FDD Document
0 335,404 (4,769) | $ 2,944,568 168,428 (22,873) | | Total Member's Equity | 3,111,215 | 3,090,123 | | Total liabilities and member's equity | $ 3,198,931 | $ 3,161,602 |
Combined Statements of Operations and Comprehensive Income ($000's)
| For the years ended December 31, | 2023 | (Restated) 2022 |
|---|---|---|
| Revenues and income | ||
| Franchise service fees | $ 169,842 | 152,248 |
| Synthetic royalties and master license fees | 28,705 | 22,879 |
| Franchise sales fees | 36,783 | 13,642 |
| Sales of products and services | 143,807 | 123,984 |
| Advertising and promotional fund revenue | 42,404 | 39,184 |
| Other | 30,338 | 32,014 |
| revenue | ||
| Total revenues and income | 451,879 | 383,951 |
| Cost of Sales | ||
| Products and services | 68,752 | 62,493 |
| Gross Profit | 383,127 | 321,458 |
| Selling expense | 6,939 | 8,274 |
| General and administrative expense | 18,705 | 9,033 |
| Advertising and promotional fund expense | 47,365 | 42,987 |
| Depreciation and amortization | 97,290 | 82,921 |
| Management expenses |
Source: Item 21 — Financial Statements (FDD page 91)
What This Means (2025 FDD)
According to Precision Door Service's 2025 Franchise Disclosure Document, the depreciation and amortization expense for the year ended December 31, 2023, was $97,290. This figure represents the accounting expense recognized for the reduction in value of Precision Door Service's tangible (depreciation) and intangible (amortization) assets over that year. These expenses are non-cash, meaning they don't represent actual cash outflows, but rather the allocation of the cost of assets over their useful lives.
For a prospective franchisee, understanding depreciation and amortization is crucial for assessing the true profitability and cash flow of the business. While these expenses reduce net income, they don't impact the cash available to the franchisee. Therefore, a franchisee should focus on both net income and cash flow when evaluating the financial performance of Precision Door Service.
It's also important to note that depreciation and amortization methods can vary, impacting the reported expense. Franchisees may want to inquire about the specific methods Precision Door Service uses to calculate these expenses to better understand their financial statements. Additionally, comparing these expenses to those of similar franchises can provide valuable insights into Precision Door Service's asset management and investment strategies.