What was the depreciation and amortization expense for My Salon Suite in 2023?
My_Salon_Suite Franchise · 2025 FDDAnswer from 2025 FDD Document
es | | | | and | | | | member's | | | | equity | | |
Consolidated Statements of Income
| For the years ended December 31, | 2023 | 2022 |
|---|---|---|
| Revenues | ||
| Franchise | $ 3,508,446 | $ 3,373,128 |
| sales | ||
| Royalties | 49,940,078 | 45,832,770 |
| Rental | 13,118,572 | 11,907,621 |
| income | ||
| Other | 5,787,952 | 5,952,703 |
| revenue | ||
| Total revenues | 72,355,048 | 67,066,222 |
| Costs | ||
| and | ||
| expenses | ||
| Cost | 2,310,482 | 3,374,481 |
| of | ||
| goods | ||
| gold | ||
| Selling, | 44,067,902 | 37,229,030 |
| general, | ||
| and | ||
| administrative | ||
| Depreciation | 4,536,793 | 4,092,237 |
| and | ||
| amortization | ||
| Total | 50,915,177 | 44,695,748 |
| costs | ||
| and | ||
| expenses | ||
| Operating | 21,439,871 | 22,370,474 |
| Income | ||
| Other | ||
| income | ||
| Interest | 64,168 | 199 |
| income | ||
| Foreign | 8,040 | (43,356) |
| currency | ||
| exchange | ||
| Gain | - | 253,092 |
| on | ||
| sale | ||
| of assets | ||
| Total | 72,208 | 209,935 |
| other | ||
| income, | ||
| net | ||
| Income | 21,512,079 | 22,580,409 |
| before | ||
| taxes | ||
| Income | 8,942,992 | 4,925,114 |
| tax | ||
| expense | ||
| Net income | $ 12,569,087 | $ 17,655,295 |
Consolidated Statements of Changes in Member's Equity
| Common Shares | stock | Amount | Additional Paid-in Capital | Retained Earnings | Total | |
|---|---|---|---|---|---|---|
| Balance | 1,000 | $ | 1,000 | $ 326,062,998 | $ 39,734,388 | $ 365,798,386 |
| at | ||||||
| December | ||||||
| 31, | ||||||
| 2021 | ||||||
| Parent | - | - | (11,618,027) | - | (11,618,027) | |
| Company | ||||||
| advances | ||||||
| - | ||||||
| net | ||||||
| Share-based | - | - | 955,911 | - | 955,911 | |
| compensation | ||||||
| Net income | - | - | - | 17,655,295 | 17,655,295 | |
| Balance | 1,000 | $ | 1,000 | $ 315,400,882 | $ 57,389,683 | $ 372,791,565 |
| at | ||||||
| December | ||||||
| 31, | ||||||
| 2022 | ||||||
| Parent | - | - | (18,947,698) | - | (18,947,698) | |
| Company | ||||||
| advances | ||||||
| - | ||||||
| net | ||||||
| Share-based | - | - | 1,144,951 | - | 1,144,951 | |
| compensation | ||||||
| Net income | - | - | - | 12,569,087 | 12,569,087 | |
| Balance | 1,000 | $ | 1,000 | $ 297,598,135 | $ 69,958,770 | $ 367,557,905 |
| at | ||||||
| December | ||||||
| 31, | ||||||
| 2023 |
Consolidated Statements of Cash Flows
| For the years ended December 31, | 2023 | 2022 |
|---|---|---|
| Operating | ||
| activities | ||
| Net income | $ 12,569,087 | $ 17,655,295 |
| Adjustments | ||
| to | ||
| reconcile | ||
| net | ||
| income | ||
| to | ||
| net | ||
| cash | ||
| provided by operating activities: | ||
| Bad | 429,277 | 58,670 |
| debt | ||
| expense | ||
| Depreciation | 4,502,473 | 4,043,757 |
| & | ||
| amortization | ||
| Share-based | 1,144,951 | 955,911 |
| compensation | ||
| expense | ||
| Gain | - | (253,092) |
| on | ||
| sale | ||
| of | ||
| assets | ||
| Capital | 323,146 | - |
| Asset | ||
| Impairment | ||
| Deferred | 182,406 | (526,188) |
| income | ||
| taxes | ||
| Amortization | 4,322,294 | 3,957,006 |
| of | ||
| right-of-use | ||
| asset | ||
| Changes in operating assets and | ||
| liabilities, | ||
| net | ||
| of | ||
| businesses | ||
| acquired: | ||
| Accounts | (715,354) | (1,222,781) |
| and | ||
| notes | ||
| receivable, | ||
| trade | ||
| Amount | (494,880) | 844,519 |
| due | ||
| to/from | ||
| affiliate | ||
| Prepaid | 635,960 | 61,885 |
| expenses | ||
| Other | (817,899) | 410,263 |
| assets | ||
| Income | 3,038,140 | (841,376) |
| taxes | ||
| payable | ||
| Accounts | (353,661) | (236,487) |
| payable | ||
| Accrued | 4,598,741 | 1,499,001 |
| liabilities | ||
| Other | (538,612) | (2,367,045) |
| long-term | ||
| liabilities | ||
| Deferred | (753,097) | 108,492 |
| revenue | ||
| Operating | (3,407,70) | (3,613,275) |
| lease | ||
| obligation | ||
| Net | 24,665,263 | 20,534,555 |
| cash | ||
| provided | ||
| by | ||
| operating | ||
| activities | ||
| Investing | ||
| activities | ||
| Capital | (2,715,270) | (3,563,623) |
| expenditures | ||
| Proceeds | - | 725,000 |
| from | ||
| sale | ||
| of | ||
| assets | ||
| Acquisition | (6,784,799) | - |
| of | ||
| a | ||
| business, | ||
| net | ||
| of | ||
| cash | ||
| acquired | ||
| Net | (9,500,069) | (2,838,623) |
| cash | ||
| used | ||
| in |
Source: Item 6 — Other Intangibles and Goodwill (FDD pages 274–314)
What This Means (2025 FDD)
According to My Salon Suite's 2025 Franchise Disclosure Document, the total depreciation and amortization expense for the year ending December 31, 2023, was presented in several different ways within the document. One presentation shows depreciation and amortization combined as $4,536,793. Another presentation shows depreciation at $2,652,140 and amortization at $1,850,332. Finally, a third presentation shows depreciation and amortization combined as $4,502,473, with amortization of right-of-use asset listed separately as $4,322,294. These figures reflect the expenses related to the wear and tear of assets and the spreading of the cost of intangible assets over their useful lives.
For a prospective My Salon Suite franchisee, understanding depreciation and amortization is crucial for assessing the financial health and profitability of the franchise. Depreciation typically relates to tangible assets like equipment and leasehold improvements, while amortization concerns intangible assets. These non-cash expenses impact the net income and can affect the franchisee's tax liabilities. The discrepancies in the presentations of these expenses may be due to different accounting methods or categorization of assets.
It is important for potential franchisees to seek clarification from My Salon Suite regarding these figures. Understanding the specific assets being depreciated or amortized, the methods used, and any changes in accounting practices is essential for accurate financial planning. Franchisees should also consult with a financial advisor to fully understand the implications of these expenses on their investment and profitability. This due diligence will help in making informed decisions about the franchise opportunity and managing their business effectively.