What is the total amount of My Salon Suite's operating lease obligations 'Thereafter' (after 2028)?
My_Salon_Suite Franchise · 2025 FDDAnswer from 2025 FDD Document
2022, respectively.
Future payments due under operating and finance leases by fiscal year as of December 31, 2023 are as follows:
| Years ending December 31: | Operating | Financing |
|---|---|---|
| Leases | Leases | |
| 2024 | $ 5,465,738 | $ 23,369 |
| 2025 | 5,700,938 | 23,369 |
| 2026 | 5,734,924 | 23,369 |
| 2027 | 5,648,670 | 23,369 |
| 2028 | 5,148,796 | 11,685 |
| Thereafter | 47,001,286 | - |
| Total | $ 74,700,352 | $ 105,161 |
| remaining | ||
| lease | ||
| payments | ||
| at | ||
| December | ||
| 31, | ||
| 2023 | ||
| Less: | (14,759,746) | (9,471) |
| portion | ||
| representing | ||
| imputed | ||
| interest | ||
| Present | $ 59,94 |
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 company's operating lease obligations 'Thereafter' (after 2028) amount to $47,001,286. This figure represents the cumulative lease payments extending beyond the initial five-year period detailed in the table. These lease obligations primarily pertain to commercial retail spaces used by My Salon Suite and Salon Plaza brands, where compartmentalized suites are subleased to beauty professionals.
My Salon Suite's typical lease arrangements do not extend beyond 10 years, but often include renewal options in 5-year increments. These renewal options are generally factored into the calculated lease liabilities. The decision to renew is influenced by the significant construction costs associated with My Salon Suite locations, which feature highly compartmentalized footprints and semi-permanent fixtures.
The document also indicates that the total operating lease payments made by My Salon Suite were $4,436,949 in 2023 and $4,410,805 in 2022. These payments are recorded as selling, general, and administrative costs and expenses on the Consolidated Statements of Income. Understanding these lease obligations is crucial for prospective franchisees as it reflects the long-term financial commitments associated with the real estate aspect of the business.