What is the range of estimated useful lives for equipment 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 lives for equipment range from 3 to 10 years. This means that Dq Treat depreciates its equipment over this period for accounting purposes. Depreciation is calculated using the straight-line method.
For a prospective franchisee, this information is relevant for understanding the long-term financial planning and potential capital expenditures associated with the franchise. Knowing the useful life of equipment helps in forecasting when equipment may need to be replaced and planning for those expenses. It also affects the franchisee's tax obligations, as depreciation is a deductible expense.
In addition to equipment, Dq Treat also depreciates leasehold improvements over the shorter of 20 years or the remaining lease term, and buildings over 15 to 40 years. Significant improvements that extend the lives of property and equipment are capitalized, while costs for repairs and maintenance are expensed as incurred. This provides a comprehensive overview of how Dq Treat handles its long-term assets from an accounting perspective.