Over what period are furniture, equipment, and vehicles depreciated for Carbones Pizzeria?

According to Carbones Pizzeria's 2025 Franchise Disclosure Document, furniture, equipment, and vehicles are depreciated using the straight-line method over a period of five to seven years. Leasehold improvements are depreciated over a period that is the shorter of either the lease term or the life of the asset.

Depreciation is an accounting method of allocating the cost of an asset over its useful life. The straight-line method means that the cost of the asset is evenly distributed over the depreciation period. For a Carbones Pizzeria franchisee, this means that the initial investment in furniture, equipment, and vehicles will be recognized as an expense over five to seven years, which can impact the business's profitability in the short term.

The depreciation period affects the business's financial statements and tax obligations. A longer depreciation period reduces the annual depreciation expense, which can increase short-term profitability but may also increase taxable income. Conversely, a shorter depreciation period increases the annual depreciation expense, reducing short-term profitability and potentially lowering taxable income. Franchisees should consult with a financial advisor to understand the implications of depreciation on their specific financial situation.