What was the net amount of bad debt (recoveries)/losses for My Salon Suite in 2024?
My_Salon_Suite Franchise · 2025 FDDAnswer from 2025 FDD Document
receivables are written off through the allowance account when it is determined the receivable will not be collected. Accounts receivable may also be converted to notes receivable due from franchisees at the discretion of the Company.
Changes in the Company's allowance for credit losses, including accounts and notes receivable, for the years ended December 31 are as follows:
| | 2024 | 2023 | |--------------------------
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 net amount of bad debt (recoveries)/losses for the year 2024 was a negative $85,758. This indicates that My Salon Suite recovered more from bad debt than it lost during that year.
For a prospective franchisee, this figure is relevant because it provides insight into the financial health and stability of My Salon Suite. A negative value suggests effective debt recovery processes or a low incidence of bad debt. This could be indicative of the clientele's financial stability or the effectiveness of My Salon Suite's financial management practices.
In comparison, the net bad debt (recoveries)/losses for 2023 was $429,277, a significantly higher amount. The large swing from a $429,277 loss in 2023 to a recovery of $85,758 in 2024 could signal changes in My Salon Suite's financial management, economic conditions affecting clients, or other factors. A franchisee should inquire about the reasons for this variance to better understand the financial dynamics of the franchise system.