What was the depreciation expense for Stretch Zone in 2022?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
| principalundertheSeniorCreditFacilityof$4,300,000onthedateofthisagreement. | |||
|---|---|---|---|
| On April 18, 2025, the Parent entered into $4,300,000 | of Unsecured Subordinated | Convertible Promissory | Notes |
| with a maturity date of October 19, 2026 at an applicable |
Source: Item 3 — Franchisee/Debtor's Warranties. (FDD pages 263–364)
What This Means (2025 FDD)
According to Stretch Zone's 2025 Franchise Disclosure Document, the depreciation expense for the years ended December 31, 2023 and 2022 amounted to $6,977 and $6,531, respectively. This indicates that in 2022, Stretch Zone had a depreciation expense of $6,531.
Depreciation expense represents the reduction in value of Stretch Zone's assets (such as furniture and fixtures) over time due to wear and tear or obsolescence. The FDD states that furniture and fixtures are depreciated on a straight-line basis over an estimated useful life of 60 to 84 months. This means the cost of these assets is spread evenly over their useful life.
For a prospective franchisee, understanding depreciation expense is important for assessing the financial health and stability of Stretch Zone. While depreciation is a non-cash expense, it reflects the ongoing cost of maintaining and replacing assets, which can impact profitability over time. A consistent depreciation expense, like the one shown, can indicate stable asset management practices.