What is the typical lease term, in years, for My Salon Suite locations?
My_Salon_Suite Franchise · 2025 FDDAnswer from 2025 FDD Document
ting guidance are more fully explained in this report under Revenue Recognition.
Notes to Consolidated Financial Statements
The base terms for most of our lease arrangements typically do not extend beyond 10 years. We commonly have renewal options in our leases in 5-year increments that are generally included in the calculated lease liabilities and associated right-of-use assets. All of the renewal options considered for future lease liabilities are associated with the My Salon Suite and Salon Plaza brands, which can have significant construction costs due to their highly compartmentalized footprint with generally semi-permanent fixtures that are not easily moved into a new space. Due to these factors, it is almost always more economically feasible to stay in the leased space and make cosmetic updates versus moving to a new space.
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 typically does not extend lease arrangements beyond 10 years. However, My Salon Suite commonly includes renewal options in their leases, generally in 5-year increments. These renewal options are usually factored into the calculated lease liabilities and associated right-of-use assets.
My Salon Suite's decision to include renewal options is influenced by the significant construction costs associated with their highly compartmentalized footprint. The semi-permanent fixtures are not easily moved to a new space. Because of these factors, it is generally more cost-effective for My Salon Suite to remain in the existing leased space and make cosmetic updates rather than relocating to a new location.
Additionally, the document states the weighted average remaining lease term for operating leases is 14 years and for finance leases is 5 years. These figures provide insight into the duration of My Salon Suite's lease commitments and financial planning. Understanding the lease terms and renewal options is crucial for prospective franchisees as it impacts long-term financial obligations and operational stability.