What is the depreciation method used by Cd One Price Cleaners for property and equipment?
Cd_One_Price_Cleaners Franchise · 2025 FDDAnswer from 2025 FDD Document
Property and Equipment – Depreciation and amortization of property and equipment is computed using the straight-line method over the estimated useful life. Estimated lives are as follows:
Office furniture 7 years Computer equipment 3 – 5 years Computer software 5 years Leasehold improvements 10 years
Source: Item 22 — Contracts (FDD page 72)
What This Means (2025 FDD)
According to Cd One Price Cleaners' 2025 Franchise Disclosure Document, the company uses the straight-line method to calculate depreciation and amortization for its property and equipment. This method evenly distributes the cost of an asset over its estimated useful life.
The estimated useful lives for different types of assets are as follows: office furniture is depreciated over 7 years, computer equipment over 3 to 5 years, computer software over 5 years, and leasehold improvements over 10 years. This means that the cost of these assets will be expensed in equal amounts each year over their respective useful lives.
For a prospective Cd One Price Cleaners franchisee, understanding the depreciation method and estimated useful lives of assets is important for financial planning and forecasting. It affects the franchisee's net income and tax obligations. The straight-line method is a common and straightforward approach, making it easier to predict and manage these expenses. Franchisees should consult with a financial advisor to fully understand the implications of depreciation on their business.