What was the purchase amount of property and equipment for Mr. Sandless at the end of 2022?
Mr_Sandless Franchise · 2025 FDDAnswer from 2025 FDD Document
from its members' or related companies. These advances are due on demand and do not bear interest. As of December 31, 2024 and 2023, the amount due to a related party was $0 and $0, 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 charged to expense as incurred. Property and equipment consist of office equipment, computer equipment and automobiles. At December 31, 2024 and 2023 these assets had a book value of $44,492 and $64,898, respectively. Depreciation expense for the years ended December 31, 2024, and 2023 was $21,196 and $11,069, respectively.
**7.
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 41–42)
What This Means (2025 FDD)
According to Mr. Sandless's 2025 Franchise Disclosure Document, the book value of property and equipment at the end of 2022 was $7,290. These assets include office equipment, computer equipment, and automobiles. The document states that Mr. Sandless uses the straight-line depreciation method over an estimated useful life of five years for these assets.
For a prospective franchisee, this indicates the depreciated value of the company's physical assets at that time. It's important to note that this is the book value, which reflects the original cost minus accumulated depreciation, and may not represent the current market value of the assets. The depreciation expense for the year ended December 31, 2022, was $13,191.
Understanding the depreciation method and asset valuation can be useful for a franchisee in projecting future capital expenditures and understanding the financial health of Mr. Sandless. Reviewing these figures over several years, as provided in the FDD, can give a sense of the company's investment in and management of its physical assets. It is important to note that these financial statements are prepared without an audit.