What was the non-cash impact of lease modifications for My Salon Suite in the first disclosed year?
My_Salon_Suite Franchise · 2025 FDDAnswer from 2025 FDD Document
| Supplemental disclosure: Cash paid for income taxes | $ 5,028,164 | $ 2,603,475 |
|---|---|---|
| Cash | $ 66,388 | $ 695 |
| received | ||
| for | ||
| interest | ||
| S | ||
| upplemental | ||
| noncash | ||
| disclosures: | ||
| Fixed | $ 704,463 | $ - |
| assets | ||
| purchased | ||
| and | ||
| unpaid, | ||
| included | ||
| in | ||
| accounts payable and accrued liabilities | ||
| Right-of-use | ||
| assets | ||
| recorded | ||
| upon | ||
| adoption | ||
| of | ||
| ASC | ||
| 842 | $ - | $ 42,546,655 |
| Right-of-use | $ - | $ 41,754,431 |
| liabilities | ||
| recorded | ||
| upon | ||
| adoption | ||
| of | ||
| ASC 842 | ||
| Operating | $ 17,621,018 | $ 1,183,320 |
| right-of-use | ||
| assets | ||
| obtained | ||
| in | ||
| exchange | ||
| for right-of-use liabilities | ||
| Non-cash | $ 1,124,755 | $ 4,987,904 |
| impact |
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 non-cash impact of lease modifications in 2022 was $4,987,904. In 2023, the non-cash impact of lease modifications was $1,124,755. This indicates a significant change in the non-cash impact of lease modifications between the two years presented in the FDD.
For a potential My Salon Suite franchisee, this information is relevant because lease modifications can affect the financial obligations and assets of the company. Non-cash impacts mean these changes don't involve immediate cash outlays but still affect the company's balance sheet, particularly concerning right-of-use assets and lease liabilities.
The fluctuation in non-cash impacts from year to year could be due to various factors, such as changes in lease terms, amendments to existing leases, or the adoption of new accounting standards. Understanding these non-cash impacts is crucial for franchisees to assess the overall financial health and stability of My Salon Suite.
Prospective franchisees should seek clarification from My Salon Suite regarding the nature of these lease modifications and their potential implications for individual franchise locations. It would be prudent to understand what events or decisions led to such a significant difference in non-cash impacts between 2022 and 2023.