What was the amount of share-based compensation expense for My Salon Suite in 2023?
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 expense for the year ending December 31, 2023, was $1,144,951. This figure represents the expense recognized by My Salon Suite for equity-based compensation, such as stock options, provided to its employees. This expense is a non-cash transaction that reflects the value of stock-based awards granted to employees as part of their compensation packages.
For a prospective franchisee, understanding share-based compensation is important as it provides insight into the company's overall financial health and how it compensates its employees. While franchisees are not directly impacted by this expense, it is an indicator of how My Salon Suite manages its resources and incentivizes its workforce. A healthy level of share-based compensation can suggest that the company is investing in its employees and aligning their interests with the company's long-term success.
The inclusion of share-based compensation in the financial statements is in accordance with accounting standards (FASB ASC Topic 718), ensuring transparency and comparability. Franchisees can use this information, along with other financial data, to assess the financial stability and management practices of My Salon Suite. This expense is part of the broader financial picture that helps franchisees evaluate the overall health and sustainability of the franchise system.