What was the total deferred expense for My Salon Suite in 2024?
My_Salon_Suite Franchise · 2025 FDDAnswer from 2025 FDD Document
ts sales force, and in certain instances, third party brokers to obtain leads for new franchise arrangements. The costs for internal sales commissions and third-party broker fees are amortized over the agreement term of each respective contract starting from the opening date of the franchise center.
Balance sheet balances related to ASC 606 consists of the following on December 31:
| 2024 | 2023 | |
|---|---|---|
| Deferred Revenue | $ 3,717,216 | $ 2,949,793 |
| Current d |
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 total deferred expense for the year 2024 was $4,161,385. This figure is broken down into two categories: current deferred expenses, which are included in prepaid expenses, amounting to $1,148,185, and non-current deferred expenses, which are included in other assets, totaling $3,013,200.
Deferred expenses represent costs that My Salon Suite has already paid but will recognize as expenses over a future period. The current portion includes expenses expected to be recognized within the next year, while the non-current portion covers expenses to be recognized over a longer period. These expenses are accounted for in this way to match the expense recognition with the period in which the benefit is received, following accrual accounting principles.
For a prospective My Salon Suite franchisee, understanding deferred expenses can provide insight into the company's financial management and accounting practices. It's important to note that these figures reflect the expenses of the company itself, not necessarily the costs a franchisee would incur. However, reviewing these figures can help a franchisee understand how My Salon Suite manages its own expenses and how it adheres to accounting standards. Franchisees may want to inquire about the types of expenses that are typically deferred and the periods over which they are recognized to better understand the company's financial reporting practices.