What were the capital expenditures for My Salon Suite in 2024?
My_Salon_Suite Franchise · 2025 FDDAnswer from 2025 FDD Document
The furniture, equipment and developed software have an expected life of three to seven years, and leasehold improvements are amortized over the shorter of the life of the lease or the useful life of the assets. Total fixed assets are inclusive of construction in process of $3,339,301 and $1,905,869 at December 31, 2024 and 2023, respectively, and is primarily included in leasehold improvements. Depreciation expense was $3,935,437 and $2,652,140 for the years ended December 31, 2024 and 2023, respectively.
The Company incurred $1,480,792 and $2,869,038 of transaction costs for the year ended December 31, 2024, and December 31, 2023, respectively, which are included in the accompanying consolidated statement of operations.
The total cash consideration paid of $4,224,473 was allocated to the assets acquired and liabilities assumed by the Company based on management estimates of their fair value in accordance with FASB ASC Topic 805, Business Combinations, on the date of acquisition.
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 total fixed assets, inclusive of construction in process, were $3,339,301 as of December 31, 2024. This figure is primarily included in leasehold improvements. In comparison, the total fixed assets inclusive of construction in process were $1,905,869 at the end of 2023.
Additionally, My Salon Suite incurred transaction costs of $1,480,792 related to the acquisition of additional SMF Corporate locations for the year ended December 31, 2024. These costs are included in the consolidated statement of operations. The company executed asset purchase agreements for two corporate salon suite locations on January 30, 2024, and one corporate salon suite location on August 1, 2024. The total cash consideration paid for these acquisitions was $4,224,473.
For a prospective franchisee, these figures provide insight into the scale of investments My Salon Suite makes in its corporate locations. The capital expenditures reflect ongoing investments in leasehold improvements and strategic acquisitions to expand the company's corporate footprint. It's important to note that these expenditures are for corporate locations and may not directly reflect the investment required for a new franchise location. However, understanding these figures can help a franchisee gauge the financial health and growth strategy of My Salon Suite.