What is the depreciation period for capital assets when calculating Net Book Value for a Checkers franchise?

According to Checkers's 2025 Franchise Disclosure Document, when calculating the Net Book Value of purchased assets, all capital assets will be depreciated on a straight-line basis over a period not exceeding five years. This depreciation will be calculated without any residual value.

This valuation method is relevant if Checkers exercises its option to purchase the franchisee's restaurant assets upon termination or expiration of the franchise agreement. The Net Book Value is one factor used to determine the purchase price in such a scenario. Having a defined depreciation period ensures a consistent and predictable calculation of the asset's value over time.

For a prospective Checkers franchisee, this means that the capital assets they acquire for their restaurant will be depreciated for accounting purposes over a maximum of five years. This depreciation schedule impacts the franchisee's financial statements and tax obligations. It is important for franchisees to maintain accurate books and records to properly calculate and report depreciation, as these records will be used if Checkers decides to purchase the assets. The valuation will be performed by an appraiser selected by Checkers, adding an element of objectivity to the process.