What was the depreciation expense for Mr. Sandless at the end of the year 2021?
Mr_Sandless Franchise · 2025 FDDAnswer from 2025 FDD Document
was $82,500 and $110,000, respectively.
The Company periodically receives funds from its members' or related companies. These advances are due on demand and do not bear interest. As of December 31, 2022, and 2021, the amount due to a related party was $300 and $14,224, respectively.
6. PROPERTY AND EQUIPMENT
Property and equipment are stated at cost. Depreciation is computed using the straight-line method over the estimated useful life of the asset, which is five years. Expenditures for repairs and maintenance are charge
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 41–42)
What This Means (2025 FDD)
According to Mr. Sandless's 2025 Franchise Disclosure Document, the depreciation expense for the year ending December 31, 2021, was $14,091. This figure reflects the reduction in value of Mr. Sandless's assets, such as office equipment, computer equipment, and automobiles, over that year. These assets are depreciated using the straight-line method over an estimated useful life of five years.
Depreciation is a non-cash expense that reflects the wear and tear or obsolescence of assets. For a prospective Mr. Sandless franchisee, understanding depreciation is important for assessing the company's financial health and how it manages its assets. It also affects the franchisee's own potential tax liabilities and profitability, as they too will need to account for depreciation of their business assets.
The FDD also notes that at December 31, 2022, and 2021, the book value of these assets was $7,290 and $19,944, respectively. This indicates the net value of the assets after accounting for accumulated depreciation. Reviewing these figures helps potential franchisees understand the scale of Mr. Sandless's investments in property and equipment and how these assets are being managed over time.