As of December 31, 2024, what was the total value of goods on hand for Bb.Q Chicken?
Bb_Q_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
| inventory reserve of $39,524. The balance at December 31, 2024 are as follows: | ||
|---|---|---|
| G o o d s o n h a n d | $6 ,5 8 4 ,7 4 2 | |
| I n - T r a n s it | - | |
| T o ta l | $6 ,5 8 4 ,7 4 2 |
Source: Item 23 — RECEIPTS (FDD pages 62–283)
What This Means (2025 FDD)
According to Bb.Q Chicken's 2025 Franchise Disclosure Document, as of December 31, 2024, the value of goods on hand was $6,584,742. There were no goods listed as 'in-transit' at that time. The total value, therefore, remained $6,584,742. This valuation reflects the cost of inventories stated using the first-in, first-out (FIFO) method.
Bb.Q Chicken monitors its inventory and may record write-downs or reserves for excess or obsolete inventory based on factors such as the aging of inventory, forecasted demand, future product sales prices, pricing trends, and margins. In this case, the company recorded an inventory reserve of $39,524. This reserve accounts for potential differences between estimated and actual inventory losses, which could materially impact the company's financial position, results of operations, and cash flows.
For a prospective franchisee, understanding the inventory valuation and reserve policies is crucial. It provides insight into how Bb.Q Chicken manages its inventory and accounts for potential losses. This can affect the franchisee's own inventory management practices and financial planning, as they will need to adhere to the franchisor's standards for product quality and supply chain management. Additionally, franchisees should be aware of the potential for inventory write-downs and how these could impact their profitability.