For Clean Your Dirty Face, what is the estimated useful life over which equipment is depreciated?

According to Clean Your Dirty Face's 2025 Franchise Disclosure Document, the company depreciates its equipment using the straight-line method over an estimated useful life of 5 years. This means that the initial cost of the equipment is spread evenly over five years as an expense on the company's income statement.

For a prospective Clean Your Dirty Face franchisee, understanding the depreciation method and useful life of equipment is important for financial planning. It allows the franchisee to anticipate the annual expense related to the equipment and factor it into their profitability calculations. This also affects the franchisee's tax obligations, as depreciation is a deductible expense.

The FDD also notes that maintenance and repairs are charged to expense when incurred, while assets with a useful life beyond one year or repairs and maintenance that extend the useful life of an asset beyond one year are capitalized and depreciated over the asset's useful life. This distinction is important for franchisees to understand, as it affects how they account for these expenses. Capitalizing and depreciating extends the period over which the expense is recognized, while expensing recognizes the entire cost in the current period.