What is the range of estimated useful lives used by Crave Cookies for depreciable assets?
Crave_Cookies Franchise · 2025 FDDAnswer from 2025 FDD Document
Property and equipment acquisitions are stated at cost, less accumulated depreciation and amortization. Depreciation and amortization are charged to expense on the straight-line basis over the estimated useful life of each asset.
The estimated useful lives for each major depreciable classification of property and equipment are as follows:
Equipment 3-5 years
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 47)
What This Means (2025 FDD)
According to Crave Cookies' 2025 Franchise Disclosure Document, the company uses a straight-line depreciation method over the estimated useful life of its assets. For equipment, the estimated useful life is between 3 to 5 years.
For a prospective Crave Cookies franchisee, this means that when you purchase equipment for your store, Crave Cookies will depreciate it over a 3 to 5 year period. This depreciation is an accounting method to allocate the cost of the equipment over its useful life, which impacts the financial statements of the franchise.
The depreciation method and estimated useful lives are important for franchisees to understand as they affect the reported profits and tax liabilities of the business. The straight-line method evenly distributes the cost of the asset over its useful life, providing a consistent depreciation expense each year. This can help in financial planning and forecasting for the Crave Cookies franchise.
It is important to note that the estimated useful life is just that—an estimate. The actual useful life of the equipment may be shorter or longer depending on usage, maintenance, and other factors. If equipment needs to be replaced sooner than expected, it could result in unexpected capital expenditures for the franchisee.