What was Anago's estimated allowance for doubtful accounts as of December 31, 2024, 2023, and 2022?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
hree months or less to be cash equivalents.
NOTE A - PRINCIPLES OF CONSOLIDATION, NATURE OF ACTIVITIES AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Agency Billing
The Company does maintain certain master franchisees (EHLB, Inc., PBTR, Inc., CCTD Inc. and APLR, Inc.). These entities acquire and sell contracts to franchisees throughout their territorial areas. These entities invoice and collect outstanding balances on these contracts on behalf of the franchisees which is considered "agency billings" or "contract sales". Agency billings collected are disbursed to the franchise on a monthly basis.
Accounts Receivable, Net
These entities act as a flow through for the agency billings and therefore is reported net on the consolidated statement of operations. Agency billing collections received prior to the services provided have been recorded as deferred revenue on the consolida
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, the allowance for doubtful accounts was estimated by management to be $0 for December 31, 2024, 2023, and 2022. Anago's accounting practices involve stating accounts receivable, net of expected collections from royalties and franchise fees. They do not charge interest or finance charges on past due balances. Balances exceeding 30 days are considered past due.
When management believes an account receivable is uncollectible and all collection methods have been exhausted, the balance is charged off through the allowance for doubtful accounts. Anago estimates this allowance based on the credit risk of specific franchisees, historical trends, and other relevant information.
Typically, Anago does not require collateral or other security to support accounts receivable. The fact that the allowance for doubtful accounts is reported as $0 for the past three years could indicate effective collection policies or a low incidence of uncollectible accounts during this period. However, it is important to note that this is an estimate and actual uncollectible amounts may vary.