According to My Salon Suite's 2025 Franchise Disclosure Document, the net right-of-use assets as of December 31, 2023, were $60,777,646. This figure represents the value of the company's rights to use leased properties, primarily commercial retail spaces for My Salon Suite and Salon Plaza locations. These locations are then subleased to beauty professionals.

The right-of-use assets are a significant component of My Salon Suite's total assets. The company's leasing strategy involves subleasing compartmentalized suites to beauty professionals, which accounts for a substantial portion of the lease liabilities and right-of-use assets on the consolidated balance sheet. The base terms for most lease arrangements typically do not extend beyond 10 years, but renewal options in 5-year increments are common and generally included in the calculated lease liabilities and associated right-of-use assets.

For a prospective franchisee, understanding the valuation and amortization of these right-of-use assets is crucial. The leases can have significant construction costs due to the compartmentalized footprint with semi-permanent fixtures. It is almost always more economically feasible to stay in the leased space and make cosmetic updates versus moving to a new space. The company also elects the practical expedient to not separate lease components from non-lease components for all of its equipment leases and therefore the non-lease components are factored into the calculation of lease liabilities and associated right-of-use assets. The company is choosing to separate lease and non-lease components for all its building leases, and the associated non-lease components, such as Common Area Maintenance and Real Estate Taxes, are expensed as incurred.