What accounting principles does Augusta Lawn Care deviate from in its depreciation methods?

The 2025 Augusta Lawn Care FDD specifies the depreciation method used if Augusta Lawn Care elects to purchase the franchisee's business assets upon termination of the franchise agreement. In this scenario, the equipment, supplies, and inventory will be valued at the lower of their depreciated value or fair market value. Other tangible personal property will be depreciated using the straight-line method over a five-year life, subtracting any existing liens or encumbrances.

While the FDD states that the company's financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (US GAAP), the specific application of a straight-line depreciation method over five years for tangible personal property in the event of Augusta Lawn Care purchasing the business may or may not align with how a franchisee would typically depreciate those assets.

Franchisees should consult with a financial advisor or accountant to understand the potential differences between Augusta Lawn Care's valuation method during a buy-back and standard depreciation practices. This is particularly important for long-term financial planning and understanding potential tax implications related to asset depreciation and potential sale.