According to Gold Star's FDD, what is the depreciation timeframe for buildings?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
| 2025 | $ | 1,332,933 |
|---|---|---|
| 2026 | 1,193,998 | |
| 2027 | 949,919 | |
| 2028 | 958,649 | |
| 2029 | 989,711 | |
| Thereafter | · | 10,086,061 |
| Total Undiscounted Cash Flows | 15,511,271 | |
| Less Present Value Discount | 4,052,404 | |
| Total Lease Liabilities | $_ | 11,458,867 |
NOTE 15 – LEASING REVENUE
The Company has several agreements with lessees to occupy space in facilities originally leased or owned by the Company. The lease agreements are classified as operating leases. The leases expire at various times through February 2038. Rental revenue for the years ended
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
Based on the 2025 Gold Star FDD, while there is information on building assets and accumulated depreciation, the document does not explicitly state the depreciation timeframe for buildings. The FDD includes balance sheets showing the value of buildings and accumulated depreciation for 2022, 2023, and 2024. For example, the building value on December 31, 2024 was $16,002,653 with accumulated depreciation of $7,937,500.
Without a specified depreciation timeframe, it's difficult to project the annual depreciation expense for a Gold Star franchise location. Depreciation is a significant non-cash expense that affects the profitability of a business over time. Understanding the depreciation schedule is crucial for accurate financial forecasting and tax planning.
A prospective Gold Star franchisee should ask the franchisor directly about the depreciation methods and timelines used for building assets. Clarification on this point will help in developing realistic financial projections and understanding the long-term financial implications of investing in a Gold Star franchise.