What was the total deferred revenue for My Salon Suite in 2023?
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 revenue for 2023 was $11,980,171. This figure represents the sum of current and non-current deferred revenue. The current deferred revenue was $2,949,793, while the non-current deferred revenue amounted to $9,030,378.
Deferred revenue typically arises when My Salon Suite receives payments for services or goods that have not yet been fully provided or delivered. This is a common accounting practice, especially in franchise systems where initial franchise fees or royalties might be collected upfront but are earned over the term of the franchise agreement. The current portion represents revenue expected to be recognized within the next year, while the non-current portion extends beyond that.
For a prospective My Salon Suite franchisee, understanding deferred revenue is crucial as it reflects the company's financial obligations to deliver future services or products. A substantial deferred revenue balance can indicate strong future revenue streams, but it also signifies existing commitments. Monitoring the trend of deferred revenue—whether it's increasing or decreasing—can provide insights into the company's sales performance and its ability to fulfill its obligations.
Furthermore, the relationship between current and non-current deferred revenue can offer a view of My Salon Suite's short-term versus long-term financial health. A higher proportion of current deferred revenue might suggest a focus on near-term deliverables, while a larger non-current portion could indicate longer-term contracts or commitments. Franchisees should consider these factors as part of their due diligence to assess the financial stability and future prospects of My Salon Suite.