What is the gross carrying amount for program materials related to My Salon Suite?
My_Salon_Suite Franchise · 2025 FDDAnswer from 2025 FDD Document
ntangibles consist of the following at December 31, 2024:
| Gross Carrying Amount | Accumulated Amortization | Net | |
|---|---|---|---|
| Program materials | $ 2,525,000 | $ (2,229,861 ) | $ 295,139 |
| Trade name (indefinite-lived) | 71,400,000 | - | 71,400,000 |
| Trade name | 66,490,000 | (9,716,633 ) | 56,773,367 |
| Internally developed software | 570,000 | (514,445 ) | 55,555 |
| Market franchise agreements | 5,910,762 | (998,084 ) | 4,912,678 |
| Total | $ 146,895,762 | $ (13,459,023 ) | $ 133,436,739 |
Other intangibles consist of the following at December 31, 2023:
| Gross Carrying Amount | Accumulated Amortization | Net | |
|---|---|---|---|
| Program materials | $ 2,100,000 | $ (2,064,604 ) | $ 35,396 |
| Trade name (indefinite-lived) | 71,400,000 | - | 71,400,000 |
| Trade name | 13,640,000 | (3,541,573 ) | 10,098,427 |
| Internally developed software | 490,000 | (411,164 ) | 78,836 |
| Market franchise agreements | 810,762 | (432,582 ) | 378,180 |
| Total | $ 88,440,762 | $ (6,449,923 ) | $ 81,990,839 |
Amortization expense was $7,046,433 and $1,850,332 for the years ended December 31, 2024 and 2023, respectively.
Notes to Consolidated Financial Statements
Estimated amortization expense for finite-lived intangibles for the subsequent five years and thereafter is as follows:
| --------------------------- | -- | -- | -- | -- |
|---|
| 2025 2026 | $ 7,432,746 7,417,118 |
|---|---|
| 2027 | 7,247,073 |
| 2028 | 7,175,098 |
| 2029 | 7,165,158 |
| Thereafter | 25,599,546 |
| Total | $ 62,036,739 |
Goodwill
The changes in the carrying amount of goodwill as of December 31, 2024 and 2023 are as follows:
| 2024 | 2023 | |
|---|---|---|
| Balance at beginning of year | $ 300,287,335 | $ 296,897,247 |
| Goodwill recorded from acquisitions | 21,122,812 | 3,390,088 |
| Balance at end of year | $ 321,410,147 | $ 300,287,335 |
**7.
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 gross carrying amount for program materials is detailed in Item 6, which covers other intangibles and goodwill. There are multiple entries for program materials with different values. One entry shows a gross carrying amount of $2,525,000, with accumulated amortization of $2,229,861, resulting in a net value of $295,139. Other entries list the gross carrying amount for program materials as $2,100,000, with accumulated amortization of $2,064,604, resulting in a net value of $35,396. Another entry lists the gross carrying amount for program materials as $2,100,000, with accumulated amortization of $1,860,614, resulting in a net value of $239,386.
These figures represent the initial cost of the program materials before accounting for their depreciation or amortization over time. The accumulated amortization reflects the amount of the program materials' cost that has been expensed to date. The net value represents the remaining book value of the program materials.
For a prospective My Salon Suite franchisee, understanding these figures is crucial for assessing the value of the intangible assets of the franchise. It also helps in understanding how these assets are depreciated or amortized over their useful lives, which impacts the franchisee's financial statements and tax obligations. The FDD states that program materials are amortized over 3 years. Reviewing these figures over multiple years can provide insight into the consistency and management of these intangible assets by My Salon Suite.