What was the total amount of Beef O Bradys franchisee receivables converted to notes in 2023?
Beef_O_Bradys Franchise · 2025 FDDAnswer from 2025 FDD Document
From time to time, the Company will convert past due franchisee receivables to interest-free notes in order to formalize the repayment terms of past due balances and therefore increase the probability of collectability of amounts due from franchisees. The Company adopted the practical expedient under ASC 606, where a significant financing component is not considered when the customer payment for those services will be one year or less. If greater than a year, the Company will evaluate whether there is a significant financing component. The Company determined that a significant financing component exists for notes receivable arrangements entered into during 2023; however, management has determined it to be immaterial to the consolidated financial statements.
Source: Item 23 — RECEIPTS. (FDD pages 66–330)
What This Means (2025 FDD)
According to Beef O Bradys's 2025 Franchise Disclosure Document, the company sometimes converts past-due franchisee receivables into interest-free notes to formalize repayment terms and improve the likelihood of collecting the outstanding amounts.
For notes receivable arrangements made during 2023, Beef O Bradys determined that a significant financing component existed. However, the company's management considered this component immaterial to the consolidated financial statements.
The FDD does not specify the exact total dollar amount of franchisee receivables that were converted into notes during 2023. A prospective franchisee should seek clarification from Beef O Bradys on the specific amount of franchisee receivables converted to notes in 2023 to fully understand the company's financial practices.