How does Pump It Up depreciate leasehold improvements, and what determines the depreciation period?

According to Pump It Up's 2025 Franchise Disclosure Document, leasehold improvements are depreciated using the straight-line method. The depreciation period is determined by whichever is shorter: the lease term or the useful life of the improvements.

Depreciating leasehold improvements allows Pump It Up to spread the cost of these assets over their useful life or the lease term, whichever is shorter, rather than expensing the entire cost upfront. This can impact the reported profitability of the franchise in the early years, as depreciation expense will be recognized each year.

For a prospective Pump It Up franchisee, this means understanding the terms of their lease agreement and the estimated useful life of any leasehold improvements they make. These factors will directly affect how quickly they can depreciate these assets for accounting purposes. It is important to consult with a financial professional to understand the specific implications for their business.

In addition to leasehold improvements, Pump It Up depreciates other property and equipment, such as office furniture and equipment (5 to 7 years) and computers and software (3 to 5 years), using the straight-line method. Goodwill is amortized on a straight-line basis over a 10-year period.