What was the bad debt expense for Bb.Q Chicken in 2024?
Bb_Q_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
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Consolidated Statements of Cash Flow December 31, 2024 and 2023
| 2024 | 2023 | |
|---|---|---|
| Cash flows from operating activities: | ||
| Net Income (loss) | $ (51,129) | $ 107,888 |
| Adjustment to reconcile net income (loss) to net cash | ||
| used in operating activities: | ||
| Depreciation & amortization | 402,980 | 368,402 |
| Bad debt expenses | 42,846 | 9,370 |
| Provision for inventory reserves | 12,320 | 12,350 |
| Increase/Decrease in accounts receivable | (2,108,010) | (2,266,137) |
| Increase/Decrease in due from parent | (2,016,520) | - |
| Increase/Decrease in inventory | 1,065,214 | (1,582,637) |
| Increase/Decrease in prepaid expenses | (171,458) | 91,641 |
| Increase/Decrease in interest receivable | (11,878) | (12,530) |
| Increase/Decrease in contract asset | (140,000) | - |
| Increase/Decrease in deferred tax asset | 56,705 | (97,335) |
| Increase/Decrease in accounts payable | 1,792,542 | 1,496,963 |
| Increase/Decrease in accrued expenses | 50,353 | 9,721 |
| Increase/Decrease in taxes payable | (9,627) | 14,290 |
| Increase/Decrease in royalty payable | 2,780,651 | (1,593,686) |
| Increase/Decrease in interest payable | 92,252 | 92,000 |
| Increase/Decrease in unearned revenue | (103,250) | (134,250) |
| Increase/Decrease in other current liabilities | 20,965 | (33,994) |
| Increase/Decrease in due to parent | - | 5,174,292 |
| Increase/Decrease in right of assets | 548,639 | (5,128,467) |
| Net cash provided by operating activities | 2,253,594 | (3,472,119) |
| Cash flows from investing activities: | ||
| Acquisition of new fixed assets | (437,360) | (611,641) |
| Acquisition of intangible assets | (173,901) | (9,350) |
| Increase/Decrease in loans to others | (308,836) | (230,916) |
| Increase/Decrease in other receivables | (198,295) | (11,103) |
| Increase/Decrease in security deposits | (274,094) | (10,708) |
| Net cash used in investing activities | (1,392,486) | (873,718) |
| Cash flows from financing activities: | ||
| Bank loan | (64,040) | (59,695) |
| Increase/Decrease in lease liabilities | (405,580) | 4,955,595 |
| Net cash provided by financing activities | (469,620) | 4,895,900 |
| Net increase(decrease) in cash | 391,488 | 550,063 |
| Cash, beginning of year | 1,999,340 | 1,449,277 |
| Cash, end of year | $ 2,390,828 | $ 1,999,340 |
| Supplemental cash flow disclosures : | ||
| - Interest paid | $ 40,024 | $ 51,979 |
| - Income taxes paid | $ 204,283 | $ 74,082 |
| - Conversion of AP, royalty payable, due to parent into equity | $ 14,231,561 | |
| See Acc |
Source: Item 23 — RECEIPTS (FDD pages 62–283)
What This Means (2025 FDD)
According to Bb.Q Chicken's 2025 Franchise Disclosure Document, the bad debt expense for 2024 was $42,846. This figure is part of the cash flow statement, specifically within the adjustments to reconcile net income (loss) to net cash used in operating activities. Bad debt expense represents the amount of accounts receivable that Bb.Q Chicken estimates will not be collectible.
For a prospective franchisee, understanding the bad debt expense can provide insight into the financial management and credit policies of Bb.Q Chicken. A higher bad debt expense might indicate more lenient credit terms or difficulties in collecting payments from franchisees or other debtors. Conversely, a lower bad debt expense could suggest stricter credit policies or more effective collection efforts.
It's important to note that this figure reflects the bad debt expense for the entire Bb.Q Chicken franchise system, not just an individual franchise location. Franchisees should consider this information in conjunction with other financial metrics to assess the overall financial health and stability of the Bb.Q Chicken franchise. Comparing the 2024 bad debt expense of $42,846 to the 2023 figure of $9,370 shows a significant increase, which could warrant further investigation into the reasons behind this change.