How does Batteries Plus Bulbs determine the value at which notes receivable are stated?
Batteries_Plus_Bulbs Franchise · 2025 FDDAnswer from 2025 FDD Document
chandise Inventories*
Inventories, which primarily consist of merchandise held for resale, are stated at the lower of cost or net realizable value. Cost is determined by the first-in, first-out (Ascent) or average-cost (Batteries Plus operated stores) method.
Notes Receivable
Notes receivable are stated at the amount the Company expects to collect from outstanding balances. The Company assesses the credit history of franchises having outstanding balances along with its current relati
Source: Item 21 — Financial Statements (FDD pages 79–80)
What This Means (2025 FDD)
According to Batteries Plus Bulbs' 2025 Franchise Disclosure Document, notes receivable are recorded at the amount the company anticipates collecting from outstanding balances. Batteries Plus Bulbs evaluates the credit history of franchisees with outstanding balances and their current relationship with the company.
Amounts are written off when the receivables are deemed uncollectible. In 2024, the company recorded a charge of $0, while in 2023, the company recorded a charge of $505. Interest income on notes receivable is recognized using the effective-interest method.
This means that Batteries Plus Bulbs actively manages its notes receivable by assessing creditworthiness and relationships with franchisees to determine the appropriate value. The company also accounts for uncollectible amounts and recognizes interest income using standard accounting practices. For a prospective franchisee, this indicates that Batteries Plus Bulbs takes a proactive approach to managing its financial relationships with franchisees and adheres to standard accounting practices in doing so.