What was the accumulated depreciation for a Pump It Up location as of December 31, 2022?
Pump_It_Up Franchise · 2025 FDDAnswer from 2025 FDD Document
| December 31: | ||
|---|---|---|
| 2023 | 2022 | |
| Leasehold Improvements | $120,580 | $120,580 |
| Computer Equipment | 3,280 | 3,280 |
| Total | 123,860 | 123,860 |
| Less: Accumulated Depreciation | (46,070) | (24,831) |
| Property, Plant, and Equipment, Net | $77,790 | $99,029 |
Source: Item 23 — RECEIPTS (FDD pages 60–225)
What This Means (2025 FDD)
According to Pump It Up's 2025 Franchise Disclosure Document, the accumulated depreciation as of December 31, 2022, was $24,831. This figure represents the total depreciation recognized on the company's leasehold improvements and computer equipment up to that date. This number is important because it affects the net value of property, plant, and equipment.
For a prospective Pump It Up franchisee, understanding accumulated depreciation is crucial for assessing the financial health and asset valuation of the franchise. The FDD states that as of December 31, 2022, the total of leasehold improvements and computer equipment was $123,860. After subtracting the accumulated depreciation of $24,831, the net property, plant, and equipment was valued at $99,029.
It's important to note that depreciation is a non-cash expense that reflects the reduction in value of assets over time due to wear and tear, obsolescence, or other factors. The depreciation expense for the year ended December 31, 2022, was $16,569. Reviewing these figures helps potential franchisees understand how Pump It Up manages its assets and accounts for their declining value, which can influence profitability and tax liabilities.
Franchisees should consult with a financial advisor to fully understand the implications of depreciation on their investment and financial planning. Understanding these accounting practices can aid in making informed decisions about the long-term financial viability of a Pump It Up franchise.