For Beef O Bradys, what is the range of estimated useful lives for furniture, fixtures, 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 capitalized, while routine repairs and maintenance are expensed when incurred. Upon sale or disposal, the related cost and accumulated depreciation are removed, and any resulting gain or
Source: Item 23 — RECEIPTS. (FDD pages 66–330)
What This Means (2025 FDD)
According to Beef O Bradys's 2025 Franchise Disclosure Document, the estimated useful lives for depreciation purposes are as follows: computers have an estimated life of 1 to 3 years, furniture, fixtures, and equipment have an estimated life of 2 to 5 years, and leasehold improvements have an estimated life of 2 to 10 years. These estimates are used to calculate depreciation using the straight-line method.
For a Beef O Bradys franchisee, this means that the cost of these assets will be spread out over their estimated useful life for accounting purposes. This affects the franchisee's reported profits and taxable income each year. For example, if a franchisee purchases furniture for $10,000, and it has a useful life of 5 years, the franchisee will deduct $2,000 per year as depreciation expense.
It is important to note that leasehold improvements are amortized over the shorter of the estimated life of the lease or the estimated useful life of the improvement. This means that if the lease term is shorter than the useful life of the improvement, the cost will be spread out over the lease term. Routine repairs and maintenance are expensed when incurred, while repairs that significantly extend the lives of property and equipment are capitalized and depreciated.
These depreciation schedules are typical for the restaurant industry. Prospective franchisees should consult with a financial advisor or accountant to understand the implications of depreciation on their specific financial situation.