What was the net accounts receivable for 1 800 Packouts in 2023, after allowance for credit losses?
1_800_Packouts Franchise · 2025 FDDAnswer from 2025 FDD Document
opinion on the effectiveness of the Company'sinternal control. Accordingly, no such opinion is expressed.
- Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
- Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, th
Source: Item 23 — RECEIPT (FDD pages 67–238)
What This Means (2025 FDD)
According to 1 800 Packouts's 2025 Franchise Disclosure Document, the net accounts receivable in 2023, after allowance for credit losses, was $3,565,178. This figure represents the amount 1 800 Packouts expected to collect from franchisees for various fees, such as royalties, support, branding, insurance, training, and equipment, after accounting for potential credit losses. The allowance for credit losses, which reduces the gross accounts receivable to its net realizable value, was $105,953 in 2023.
Accounts receivable are amounts due to 1 800 Packouts from its franchisees for services rendered or products sold on credit. The allowance for credit losses is an estimate of the amount of accounts receivable that 1 800 Packouts may not be able to collect. This allowance is based on 1 800 Packouts's historical experience with franchisees, the age of the receivables, and the franchisees' ability to pay. Accounts are written off when they are determined to be uncollectible after reasonable collection efforts.
For a prospective franchisee, understanding the accounts receivable and the allowance for credit losses provides insight into 1 800 Packouts's financial health and its ability to manage franchisee accounts. A higher net accounts receivable suggests that 1 800 Packouts is effectively collecting payments from its franchisees. The allowance for credit losses indicates the level of risk associated with these receivables. Franchisees should consider these figures as part of their due diligence to assess the financial stability of 1 800 Packouts.