What was the depreciation expense for My Salon Suite for the year ended December 31, 2023?
My_Salon_Suite Franchise · 2025 FDDAnswer from 2025 FDD Document
-------------------------|-------------------------------|-------------------------------| | Furniture, equipment and internally developed software | $ 7,624,589 | $ 6,730,068 | | Leasehold improvements | 21,715,381 | 12,825,113 | | Total fixed assets | 29,339,970 | 19,555,181 | | Less: accumulated depreciation | (9,294,913) | (6,593,875) | | Fixed assets, net | $ 20,045,057 | $ 12,961,306 |
The furniture, equipment and developed software have an expected life of three to seven years, and leasehold improve
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 expense for the years ended December 31, 2024, and 2023 was reported. The depreciation expense for My Salon Suite for the year ended December 31, 2023, was $2,652,140.
Depreciation is an accounting method of allocating the cost of a tangible asset over its useful life. For My Salon Suite, this expense reflects the reduction in value of assets such as furniture, equipment, and leasehold improvements used in the business. The depreciation expense can be affected by the method used (straight-line), the estimated useful lives of the assets (three to seven years for furniture, equipment, and software; the shorter of lease life or asset life for leasehold improvements), and any impairments recognized.
Prospective franchisees should understand that depreciation is a non-cash expense, meaning it does not involve an actual outflow of cash. However, it does reduce the company's reported profit. Monitoring depreciation expense can provide insights into the capital expenditure requirements and asset management practices of My Salon Suite. Franchisees may want to compare these figures with industry benchmarks to assess the efficiency of asset utilization and the potential need for future capital investments.