What was the total cost of equipment owned by Browns Chicken as of December 31, 2024?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
s there is no significant risk with respect to these deposits. The uninsured bank balances were $0 at both December 31, 2024 and 2023.
ACCOUNTS RECEIVABLE
Management closely monitors outstanding accounts receivable, expensing any balances that are determined to be uncollectible and establishing an allowance for doubtful accounts. Based on these factors, there is a provision for doubtful accounts of $0 and $7,999 as of December 31, 2024 and 2023, respectively.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued
PROPERTY, EQUIPMENT AND DEPRECIATION
Property and equipment are stated at cost. For tax return purposes, property and equipment is depreciated by use of the modified accelerated cost recovery system (MACRS). The MACRS method of depreciation allows for the cost of eligible property to be recovered over a 3, 5, or 7-year period depending on the type of property.
For financial statement purposes, property and equipment is depreciated using the straightline method of depreciation over 5 to 10 years. Depreciation expense for book purp
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 42)
What This Means (2025 FDD)
The 2025 Browns Chicken FDD includes the consolidated balance sheets for December 31, 2024, and 2023. Note 2 to the financial statements discusses property, equipment, and depreciation. It states that property and equipment are recorded at cost and depreciated using the straight-line method over 5 to 10 years for financial statement purposes. Depreciation expense for book purposes was $11,020 for the year ended December 31, 2024.
However, the excerpt does not provide the total cost of equipment owned by Browns Chicken as of December 31, 2024. The excerpt only mentions how property and equipment are valued and depreciated, along with the depreciation expense for the year.
A prospective franchisee should ask Browns Chicken for the specific figures related to the total cost of equipment owned by the company as of December 31, 2024, to gain a clear understanding of the company's assets and financial position.