For Monicals Pizza, what is the depreciation period for leasehold improvements, and how is it determined?

According to Monicals Pizza's 2025 Franchise Disclosure Document, leasehold improvements are depreciated using the straight-line method over a period that is the lesser of the lease term or 10 years.

This means that if a Monicals Pizza franchisee signs a lease for 7 years, the cost of any leasehold improvements they make will be depreciated over those 7 years. However, if the lease term is longer than 10 years, the depreciation period will be capped at 10 years.

Depreciation is an important accounting concept for franchisees to understand. It allows them to deduct a portion of the cost of their assets each year, which can reduce their taxable income. By using the straight-line method, Monicals Pizza ensures that the depreciation expense is spread evenly over the useful life of the leasehold improvements.