What is the estimated useful life for leasehold improvements depreciation for Bath Tune Up?

According to Bath Tune Up's 2025 Franchise Disclosure Document, the depreciation of leasehold improvements is computed using the straight-line method. The estimated useful life for these improvements is 7 years, or the remaining term under the lease, whichever is shorter. This means that Bath Tune Up depreciates leasehold improvements over the shorter period to reflect the actual economic benefit the company receives from the improvements.

For a Bath Tune Up franchisee, this depreciation method affects how the cost of any leasehold improvements made to their business location is accounted for over time. Leasehold improvements are changes or upgrades made to a leased space. Instead of expensing the entire cost upfront, the franchisee will deduct a portion of the cost each year over the asset's useful life (up to 7 years) or the remaining lease term.

This approach can impact the franchisee's financial statements and tax obligations. By depreciating these costs, the franchisee reduces their taxable income in the short term, as the expense is spread out over multiple years. It is important for prospective franchisees to understand these accounting principles and consult with a financial professional to assess the specific implications for their business.