What is the depreciation timeframe for building improvements for a Sonesta Select Sonesta Essential franchise?
Sonesta_Select_Sonesta_Essential Franchise · 2025 FDDAnswer from 2025 FDD Document
| 106.1 General Rules | 67 |
|---|---|
| 106.2 Franchisee Training | 67 |
| 107 SonestA+ Service Foundations | 70 |
| 107.1 Sonesta's Service Mission | 70 |
| 107.2 SonestA+ Service Program Outline | 70 |
| 107.3 Sonesta's Service Pyramid | 70 |
| 107.3.A Cleanliness – "Everything Speaks" | 70 |
| 107.3.B Condition – "From Every Perspective" | 71 |
| 107.3.C Presence - "I Hear & See You" | 71 |
| 107.3.D Friendliness - "Creating a WOW!" | 71 |
| 107.3.E Loyalty - "Recognition and Reward" | 72 |
| 107.4 G.U.E.S.T. & Bringing our Service Mission to Life | 72 |
| 107.5 SonestA+ Service Recognition Pins Program | 73 |
| 107.6 CARE Card Recognition Program | 74 |
| 107.7 SonestA+ Best Practices | 74 |
| 107.8 SonestA+ Tool Kit | 74 |
| 108 Brand Identity and Marketing | 77 |
| 108.1 Sonesta Brand Logos and Trademarks | 77 |
| 108.2 Hotel Collateral and Graphics | 77 |
| 108.3 Signage | 77 |
| 108.4 Field Marketing | 79 |
| 108.4.A Program Overview | 79 |
| 108.4.B Advertising Programs | 80 |
| 108.4.C Hotel Certifications | 80 |
| 108.4.D Hotel & Sales Collateral | 81 |
| Building improvements Furniture and fixtures Landscaping and land improvements Construction in progress Accumulated depreciation Property and equipment, net | Up to 40 years Up to 10 years Lesser of useful life or remaining lease term N/A |
Source: Item 23 — RECEIPTS (FDD pages 84–261)
What This Means (2025 FDD)
According to Sonesta Select Sonesta Essential's 2025 Franchise Disclosure Document, building improvements can be depreciated for up to 40 years. Additionally, furniture and fixtures can be depreciated for up to 10 years, while landscaping and land improvements can be depreciated over the lesser of their useful life or the remaining lease term.
Understanding these depreciation timeframes is crucial for franchisees as it directly impacts their financial planning and tax obligations. Depreciation is the process of allocating the cost of an asset over its useful life, which affects the business's taxable income. A longer depreciation period, such as the 40 years allowed for building improvements, means that the cost is spread out over a longer time, resulting in smaller annual deductions.
For a prospective Sonesta Select Sonesta Essential franchisee, this information is essential for projecting expenses and understanding potential tax benefits. It is advisable to consult with a financial advisor or tax professional to fully understand the implications of these depreciation schedules and how they fit into the overall financial strategy of the franchise. Proper management of depreciation can significantly impact the profitability and long-term financial health of the franchise.
Construction in progress is not depreciable and accumulated depreciation is also listed in the table.