What is the depreciation timeframe for landscaping and land improvements for a Sonesta Select Sonesta Essential franchise?
Sonesta_Select_Sonesta_Essential Franchise · 2025 FDDAnswer from 2025 FDD Document
| 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 the 2025 Franchise Disclosure Document, the depreciation timeframe for landscaping and land improvements for a Sonesta Select Sonesta Essential franchise is the lesser of the useful life or the remaining lease term.
For a prospective franchisee, this means that the period over which you can deduct the cost of these improvements for tax purposes depends on how long the improvements are expected to last (their useful life) or the length of your lease, whichever is shorter. This is a standard accounting practice to match the expense of an asset with the revenue it helps generate over its lifespan.
This depreciation timeframe has implications for the franchisee's financial planning and tax strategy. It is important to accurately assess the useful life of landscaping and land improvements and to understand the terms of the property lease to determine the appropriate depreciation schedule. A shorter lease term than the useful life of the improvements would limit the depreciation period, potentially affecting profitability during the franchise term.