What depreciation method is used for Beef O Bradys property and equipment?
Beef_O_Bradys Franchise · 2025 FDDAnswer from 2025 FDD Document
Property and equipment are recorded at cost. Depreciation is calculated using the straight-line method over the following estimated useful lives of the assets:
Computers 1-3 years Furniture, fixtures and equipment 2-5 years Leasehold improvements 2-10 years
Leasehold improvements are stated at cost and amortized over the shorter of the estimated life of the lease or estimated useful life of the improvement. Repairs that significantly extend the lives of property and equipment are capita
Source: Item 23 — RECEIPTS. (FDD pages 66–330)
What This Means (2025 FDD)
According to Beef O Bradys's 2025 Franchise Disclosure Document, the company uses the straight-line method to calculate depreciation for property and equipment. This method evenly distributes the cost of an asset over its useful life.
For franchisees, this means that the cost of assets like computers, furniture, fixtures, and equipment will be deducted in equal amounts each year over their estimated useful lives. The estimated useful lives are: computers (1-3 years), furniture, fixtures, and equipment (2-5 years), and leasehold improvements (2-10 years). Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the improvement.
This depreciation method affects the franchisee's financial statements by reducing the reported profit each year by the depreciation expense. It also reduces the book value of the assets on the balance sheet. The straight-line method is a common and straightforward approach, making it easier for franchisees to understand and predict their depreciation expenses compared to accelerated methods.