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REVENUE RECOGNITION
 12 Months Ended
Jun. 30, 2020
Revenue from Contract with Customer [Abstract]  
REVENUE RECOGNITION REVENUE RECOGNITION:
In May 2014, the FASB issued amended guidance for revenue recognition which provides a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The Company adopted the amended revenue recognition guidance, ASC Topic 606, on July 1, 2018 using the full retrospective transition method which required the adjustment of each prior reporting period presented. As a result of adopting this new standard, the Company is providing its updated revenue recognition policies.
        
Revenue Recognition and Deferred Revenue:

Revenue recognized at point of sale
Company-owned salon revenues are recognized at the time when the services are provided. Product revenues for company-owned salons are recognized when the guest receives and pays for the merchandise. Revenues from purchases made with gift cards are also recorded when the guest takes possession of the merchandise or services are provided. Gift cards issued by the Company are recorded as a liability (deferred revenue) upon sale and recognized as revenue upon redemption by the customer. Gift card breakage, the amount of gift cards which will not be redeemed, is recognized proportional to redemptions using estimates based on historical redemption patterns. Product sales by the Company to its franchisees are included within product revenues in the Consolidated Statement of Operations and recorded at the time product is delivered to the franchisee. Payment for franchisee product revenue is generally collected within 30 to 90 days of delivery.
Revenue recognized over time
Franchise revenues primarily include royalties, advertising fund cooperatives fees, franchise fees and other fees. Royalty and advertising fund revenues represent sales-based royalties that are recognized in the period in which the sales occur. Generally, royalty and advertising fund revenue is billed and collected monthly in arrears. Advertising fund revenues and expenditures, which must be spent on marketing and related activities per the franchise agreements, are recorded on a gross basis within the Consolidated Statement of Operations. This increases both the gross amount of reported franchise revenue and site operating expense and generally has no impact on operating income and net income. Franchise fees are billed and received upon the signing of the franchise agreement. Recognition of these fees is deferred until the salon opening and is then recognized over the term of the franchise agreement, typically ten years. Franchise rental income is a result of the Company signing leases on behalf of franchisees as the primary obligor and entering into a sublease arrangement with the franchise. The Company recognizes franchise rental income and expense when it is due to the landlord.
The following table disaggregates revenue by timing of revenue recognition and is reconciled to reportable segment revenues as follows:
For the Year Ended June 30, 2020For the Year Ended June 30, 2019
 FranchiseCompany-ownedFranchiseCompany-owned
(Dollars in thousands)
Revenue recognized at a point in time:
Service$— $331,538 $— $749,660 
Product52,421 85,165 59,905 165,713 
Total revenue recognized at a point in time$52,421 $416,703 $59,905 $915,373 
Revenue recognized over time:
Royalty and other franchise fees$60,061 $— $59,688 $— 
Advertising fund fees13,341 — 34,073 — 
Franchise rental income127,203 — — — 
Total revenue recognized over time200,605 — 93,761 — 
Total revenue$253,026 $416,703 $153,666 $915,373 


Information about receivables, broker fees and deferred revenue subject to the revenue recognition guidance is as follows:
June 30,
2020		June 30,
2019		Balance Sheet Classification
(Dollars in thousands)
Receivables from contracts with customers, net$22,991 $23,210 Accounts receivable, net
Broker fees$20,516 $17,819 Other assets
Deferred revenue:
     Current
Gift card liability$2,543 $3,050 Accrued expenses
Deferred franchise fees unopened salons77 193 Accrued expenses
Deferred franchise fees open salons5,537 4,164 Accrued expenses
Total current deferred revenue$8,157 $7,407 
     Non-current
Deferred franchise fees unopened salons$11,855 $15,173 Other non-current liabilities
Deferred franchise fees open salons33,623 24,194 Other non-current liabilities
Total non-current deferred revenue$45,478 $39,367 

Receivables relate primarily to payments due for royalties, franchise fees, advertising fees, franchise product sales and sales of salon services and product paid by credit card. The receivables balance is presented net of an allowance for expected losses (i.e., doubtful accounts), related to receivables from franchisees. As of June 30, 2020 and 2019, the balance in the allowance for doubtful accounts was $6.9 and $2.0 million, respectively. The increase is due to an increased risk in collecting franchise receivables due to decreased franchisee cash flows as a result of the government-mandated salon closures due to the COVID-19 pandemic. The following table is a rollforward of the allowance for doubtful accounts for the periods indicated (in thousands):
Balance as of June 30, 2019$2,025 
Provision for doubtful accounts5,958 
Write-offs(1,084)
Balance as of June 30, 2020$6,899 
Broker fees are the costs associated with using external brokers to identify new franchisees. These fees are paid upon the signing of the franchise agreement and recognized as General and Administrative expense over the term of the agreement.

The following table is a rollforward of the broker fee balance for the periods indicated (in thousands):
Balance as of June 30, 2019$17,819 
Additions5,606 
Amortization(2,852)
Write-offs(57)
Balance as of June 30, 2020$20,516 

Deferred revenue includes the gift card liability and deferred franchise fees for unopened salons and open salons. Gift card revenue for the years ended June 30, 2020 and 2019 was $2.4 and $5.3 million, respectively. Deferred franchise fees related to open salons are generally recognized on a straight-line basis over the term of the franchise agreement. Franchise fee revenue for the twelve months ended June 30, 2020 and 2019 was $5.2 and $3.6 million, respectively. Estimated revenue expected to the recognized in the future related to deferred franchise fees for open salons as of June 30, 2020 is as follows (in thousands):

2021$5,471 
20225,351 
20235,174 
20244,939 
20254,577 
Thereafter13,648 
Total$39,160