What was the amount of depreciation and amortization for My Salon Suite in 2023?
My_Salon_Suite Franchise · 2025 FDDAnswer from 2025 FDD Document
1,000 | 1,000 | | Additional paid-in capital | 363,125,409 | 297,598,135 | | Retained earnings | 79,627,020 | 69,958,770 | | Accumulated other comprehensive loss | (100,769) | - | | | | | | Total member's equity | 442,652,660 | 367,557,905 | | Total liabilities and member's equity | $ 564,392,813 | $ 475,872,065 |
Consolidated Statements of Operations
| For the years ended December 31, | 2024 | 2023 |
|---|---|---|
| Revenues | ||
| Franchise sales | $ 4,110,484 | $ 3,508,446 |
| Royalties | 69,773,999 | 49,940,078 |
Source: Item 17 — (r) of the FDD and Section 13 of the Franchise Agreement disclose the existence of certain covenants restricting competition to which Franchisee must agree. The Commissioner has held that covenants restricting competition contrary to Section 9-08-06 of the North Dakota Century Code, without further disclosing that such covenants may be subject to this statue, are unfair, unjust, or inequitable within the intent of Section 51-19-09 of the North Dakota Franchise Investment Law. The FDD and the Franchise Agreement are amended accordingly to the extent required by law. (FDD pages 230–274)
What This Means (2025 FDD)
According to My Salon Suite's 2025 Franchise Disclosure Document, the depreciation and amortization expenses for the year ending December 31, 2023, totaled $4,536,793. This figure reflects the accounting recognition of the reduction in value of My Salon Suite's assets over that period. Depreciation specifically accounts for the decrease in value of tangible assets like equipment and leasehold improvements, while amortization covers the reduction in value of intangible assets. These are non-cash expenses that reflect the using up of assets.
For a prospective My Salon Suite franchisee, understanding depreciation and amortization is crucial for assessing the financial health and profitability of the franchisor. While franchisees do not directly incur these expenses at the corporate level, they reflect the overall capital investment and asset management strategies of My Salon Suite. Higher depreciation and amortization expenses might indicate significant investments in assets, which could translate to better resources and support for franchisees.
However, it's also important to consider these expenses in relation to revenue and other cost metrics. A substantial increase in depreciation and amortization from 2023 to 2024 (from $4,536,793 to $11,002,904) could signal rapid expansion or significant capital expenditures. Franchisees should inquire about the nature of these investments and how they are expected to benefit the franchise system. Understanding these figures helps potential franchisees evaluate the long-term financial stability and growth prospects of My Salon Suite.