What was the total value of My Salon Suite's prepaid expenses as of December 31, 2023?
My_Salon_Suite Franchise · 2025 FDDAnswer from 2025 FDD Document
nue as a going concern for a reasonable period of time.
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April 28, 2025
Consolidated Balance Sheets
| As of December 31, | 2024 | 2023 |
|---|---|---|
| Assets | ||
| Current assets | ||
| Cash and cash equivalents | $ 3,381,206 | $ 8,047,052 |
| Accounts receivable - net | 5,930,192 | 5,374,191 |
| Current portion of notes receivable - net | 74,080 | 66,427 |
| Amounts due from affiliates | 632,545 | 486,028 |
| Prepaid expenses | 3,809,171 | 1,956,054 |
| Other current assets | 663,352 | 736,544 |
| Total current assets | 14,490,546 | 16,666,296 |
| Fixed assets |
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 company's prepaid expenses as of December 31, 2023, totaled $1,956,054. Prepaid expenses are payments made in advance for goods or services that will be received in the future. These are considered assets on the balance sheet because they represent future economic benefits for My Salon Suite.
For a prospective My Salon Suite franchisee, understanding the level of prepaid expenses can offer insights into the company's financial management and operational strategies. High prepaid expenses might indicate that My Salon Suite is taking advantage of bulk discounts or securing favorable terms with vendors. It could also reflect significant investments in marketing or other initiatives that are paid for in advance.
However, it's important to note that prepaid expenses are not immediately liquid assets. They represent value that will be realized over time as the related goods or services are consumed. Franchisees may want to inquire about the nature of these prepaid expenses to assess their potential impact on the company's cash flow and profitability. Understanding the types of expenses that are prepaid can give a franchisee a better understanding of where the company is investing its resources and how it manages its financial obligations.