What was the allowance for credit losses for Basecamp Fitness for the year ended December 31, 2024?
Basecamp_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
(in thousands of US dollars)*
investments available for current use with an initial maturity of three months or less to be cash and cash equivalents.
Restricted Cash
Restricted cash consists of franchisee contributions held in a general advertising and marketing fund. The use of the cash is restricted to advertising and marketing expenditures, as defined. Restricted cash has been combined with cash and cash equivalents when reconciling the beginning and end of period balances in the consolidated statements of cash flows.
Accounts Receivable and Allowance for Credit Losses
Accounts receivable consists primarily of franchi
Source: Item 23 — RECEIPTS (FDD pages 62–248)
What This Means (2025 FDD)
According to Basecamp Fitness's 2025 Franchise Disclosure Document, the company had an allowance for credit losses of $1,801 for the year ending December 31, 2024. This allowance is a reserve that Basecamp Fitness sets aside to cover potential losses from uncollectible accounts receivable, which primarily consist of franchise fees, royalty fees, and trade receivables. The company's management reviews outstanding accounts receivable at the end of each year to determine if an allowance for credit losses is necessary.
For a prospective franchisee, this figure indicates the level of risk Basecamp Fitness perceives in collecting its receivables. A higher allowance might suggest a greater risk of franchisees or other debtors not paying their dues. However, the allowance for credit losses can fluctuate from year to year, as evidenced by the fact that the allowance was only $165 for the year ended December 31, 2023.
It's important to note that the allowance for credit losses is an accounting estimate and does not necessarily reflect the actual amount of uncollectible receivables. The fact that Basecamp Fitness has an allowance for credit losses is a standard accounting practice to account for potential bad debts. Franchisees may want to inquire about the company's historical collection rates and the factors that influence the allowance for credit losses to better understand the financial health and stability of the franchise system.