What was the amount of share-based compensation for My Salon Suite in 2024?
My_Salon_Suite Franchise · 2025 FDDAnswer from 2025 FDD Document
8,040 | | Gain on sale of assets | 19,157 | - | | Other expense | (27,188 ) | - | | | | | | Total other income, net | 236,645 | 72,208 | | | | | | Income before taxes | 18,589,396 | 21,512,079 | | | | | | Income tax expense | 8,921,146 | 8,942,992 | | | | | | Net income | $ 9,668,250 | $ 12,569,087 |
Consolidated Statements of Changes in Member's Equity
| Shares | Common Stock Amount | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Total | |
|---|---|---|---|---|---|---|
| Balance at December 31, 2022 | 1,000 | $ 1,000 | $ 315,400,882 | $ 57,389,683 $ | - $ 372,791,565 | |
| Parent Company transactions - net | - | - | (18,947,698) | - | - | (18,947,698) |
| Share-based compensation | - | - | 1,144,951 | - | - | 1,144,951 |
| Net income | - | - | - | 12,569,087 | - | 12,569,087 |
| Balance at December 31, 2023 | 1,000 | $ 1,000 | $ 297,598,135 | $ 69,958,770 $ | - | $ 367,557,905 |
| Parent Company transactions - net |
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 share-based compensation for the company in 2024 was $1,240,361. This figure represents the expense recognized by My Salon Suite for equity-based compensation, such as stock options granted to employees. This compensation is calculated based on the estimated fair values of the shares over the service period.
The share-based compensation is a non-cash expense, meaning it does not involve an actual outflow of cash from the company. Instead, it reflects the value of stock-based awards granted to employees as part of their compensation packages. The fair value of these awards is determined using models like the Black-Scholes option valuation model, which considers factors such as the expected life of the option, volatility of similar entities, risk-free interest rate, and dividend yield.
For a prospective franchisee, understanding share-based compensation may not directly impact their day-to-day operations. However, it provides insight into the company's overall financial health and how it incentivizes its employees. Franchisees may want to consider these figures as part of their broader due diligence when evaluating the financial stability and management practices of My Salon Suite.