When depreciating capital assets to determine Net Book Value for a Checkers franchise, what depreciation method is used?

According to Checkers' 2025 Franchise Disclosure Document, when determining the Net Book Value of purchased assets, all capital assets will be depreciated using the straight-line method. This depreciation will occur over a reasonable period, not exceeding five years, and without any residual value assigned to the assets at the end of their depreciable life.

This means that for accounting purposes, Checkers franchisees will evenly spread the cost of their capital assets (like equipment and furniture) over a maximum of five years. The straight-line method simplifies bookkeeping and provides a consistent depreciation expense each year.

For a prospective Checkers franchisee, this is important because it affects the reported profitability of the franchise. Using the straight-line method, the franchisee can expect a predictable depreciation expense, which impacts their taxable income and overall financial statements. The absence of residual value means the entire cost of the asset is depreciated over the five-year period, potentially increasing the annual depreciation expense.