How does Crave Cookies account for the cost and accumulated depreciation of property and equipment that is sold or retired?

According to Crave Cookies's 2025 Franchise Disclosure Document, the company's accounting policy regarding the disposal of property and equipment is as follows: When property and equipment are sold or retired, Crave Cookies removes both the original cost of the asset and its accumulated depreciation from the company's accounts. Any resulting gain or loss from the disposition (sale or retirement) of the asset is then reflected in the net income for the period in which the disposal occurred.

For a prospective Crave Cookies franchisee, this accounting practice means that if you sell or retire an asset used in your franchise (like ovens, furniture, or equipment), the original purchase price and the total depreciation taken on that asset will be removed from your balance sheet. The difference between the asset's book value (original cost less accumulated depreciation) and the amount you receive from selling it (if anything) will be recorded as a gain or loss on your income statement for that year.

This is a standard accounting procedure. Recognizing the gain or loss in the period of disposition ensures that the financial statements accurately reflect the economic impact of the asset's sale or retirement. It's important for franchisees to keep accurate records of all property and equipment, including purchase dates, costs, and depreciation schedules, to properly account for these transactions.