What is the estimated useful life for buildings owned by Dq Treat?
Dq_Treat Franchise · 2025 FDDAnswer from 2025 FDD Document
Property and Equipment—Property and equipment is stated at historical cost. Depreciation and amortization of property and equipment are computed on the straight-line method over the estimated useful lives of the assets or the remaining term of the lease for leasehold improvements. Estimated useful lives range from 3 to 10 years for equipment, the shorter of 20 years or remaining lease term for
leasehold improvements, and 15 to 40 years for buildings. Significant improvements that extend the lives of property and equipment are capitalized. Costs for repairs and maintenance are charged to expense as incurred. When property is retired or otherwise disposed of, the recorded cost of the assets and their related accumulated depreciation are removed from the Consolidated Balance Sheets and any related gains or losses are included in income.
Source: Item 17 — The following paragraph is added to the end of Item 17 of the Disclosure Document: (FDD pages 70–378)
What This Means (2025 FDD)
According to Dq Treat's 2025 Franchise Disclosure Document, the estimated useful life for buildings is between 15 to 40 years. This information is relevant when calculating depreciation and amortization of property and equipment using the straight-line method.
For a Dq Treat franchisee, understanding the estimated useful life of assets like buildings is crucial for financial planning and accounting. It directly impacts the annual depreciation expense, which affects the profitability reported on the income statement and the book value of assets on the balance sheet.
Significant improvements that extend the life of property and equipment are capitalized, meaning their cost is added to the asset's book value and depreciated over the extended useful life. Regular repairs and maintenance costs, however, are expensed as incurred and do not affect the asset's depreciable base. When property is retired or disposed of, the recorded cost and accumulated depreciation are removed from the balance sheets, and any gains or losses are included in the income statement.
Prospective franchisees should consult with a financial advisor to fully understand the implications of depreciation and amortization on their investment. They should also inquire about Dq Treat's specific guidelines for determining whether an expenditure qualifies as a capital improvement versus routine maintenance.