What was the depreciation expense for Pump It Up for the year ended December 31, 2023?

According to Pump It Up's 2025 Franchise Disclosure Document, the depreciation expense for the years ended December 31, 2024 and 2023 was $21,379 and $21,239, respectively. This indicates that in 2023, Pump It Up reported a depreciation expense of $21,239.

Depreciation expense represents the allocation of the cost of tangible assets, like equipment and buildings, over their useful lives. It reflects the wear and tear or obsolescence of these assets. For a prospective Pump It Up franchisee, understanding depreciation is important because it impacts the company's profitability and overall financial health. Higher depreciation expenses can reduce net income, while lower expenses might suggest older assets that could require future replacement.

It is also important to note that depreciation is a non-cash expense, meaning it doesn't involve an actual outflow of cash. However, it does reduce taxable income, which can lower income tax obligations. In addition to depreciation expense, the FDD also mentions amortization expense, which relates to intangible assets. For the years ended December 31, 2023 and 2022, the amortization expense was $296,676. Amortization and depreciation are similar concepts, but apply to different types of assets.

Prospective franchisees should consider depreciation and amortization expenses when evaluating Pump It Up's financial statements. These expenses can provide insights into the company's investment in assets and how those assets are being utilized over time. Reviewing these figures over several years can reveal trends and potential capital expenditure needs for the franchise system.