How are furniture and fixtures depreciated for a Stretch Zone franchise?

According to Stretch Zone's 2025 Franchise Disclosure Document, furniture and fixtures are recorded at cost, less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful life of the assets, which ranges from 60 to 84 months. This means that the initial cost of the furniture and fixtures is spread evenly over a period of 5 to 7 years (60 months / 12 months per year = 5 years; 84 months / 12 months per year = 7 years).

For a prospective Stretch Zone franchisee, this depreciation method affects the business's financial statements and tax obligations. The straight-line method provides a consistent and predictable depreciation expense each year, which can help in financial planning and budgeting. The depreciation expense reduces the business's taxable income, potentially lowering income tax liability during the early years of operation.

It is important to note that maintenance and repairs are expensed as incurred, meaning these costs are deducted in the period they occur and are not capitalized as part of the asset's cost. This accounting treatment is standard across many franchise systems, as it aligns with generally accepted accounting principles (GAAP). Franchisees should maintain accurate records of all furniture and fixture costs, as well as any related maintenance expenses, to ensure proper financial reporting and tax compliance.