What is All County's policy regarding allowance for doubtful accounts related to accounts receivable?
All_County Franchise · 2025 FDDAnswer from 2025 FDD Document
Accounts Receivable is recorded net of an allowance for doubtful accounts to approximate their net realizable value. Management continuously reviews accounts receivable for uncollectible accounts and writes them off accordingly. The Company considers the accounts receivable to be fully collectible, and, accordingly, no allowance for doubtful accounts is considered necessary for the years ended December 31, 2024, 2023, and 2022.
Source: Item 22 — Contracts (FDD page 43)
What This Means (2025 FDD)
According to All County's 2025 Franchise Disclosure Document, the company records accounts receivable net of an allowance for doubtful accounts to approximate their net realizable value. All County's management continuously reviews accounts receivable for uncollectible accounts and writes them off accordingly.
For the years ended December 31, 2024, 2023, and 2022, All County considered its accounts receivable to be fully collectible. Consequently, the company did not consider it necessary to have an allowance for doubtful accounts during those years.
This indicates that All County has been confident in its ability to collect outstanding payments from its franchisees and other debtors. However, this policy could change in the future if All County experiences difficulties in collecting its receivables. As a prospective franchisee, it would be prudent to inquire about the criteria All County uses to determine when an allowance for doubtful accounts becomes necessary and how this might affect the financial stability of the franchise system.