What was the allowance for doubtful accounts for Benjamin Franklin Plumbing as of December 31, 2023?
Benjamin_Franklin_Plumbing Franchise · 2025 FDDAnswer from 2025 FDD Document
ded December 31, 2024, 2023 and 2022 in residential services on the consolidated statements of comprehensive loss.
Costs Incurred to Obtain a Contract with Customers
The Company capitalizes commissions paid to brokers that are a direct result of obtaining a new franchise agreement and amortizes these costs over the franchise agreement period. These costs are capitalized in prepaid expenses and other current assets and other assets on the consolidated balance sheets. The Company recognized $1,917, $1,957 and $689 of commission costs in franchise sales expenses on the consolidated statements of comprehensive loss for the years ended December 31, 2024, 2023 and 2022.
Accounts Receivable and Allowance for Doubtful Accounts
Accounts receivable are sta
Source: Item 22 — CONTRACTS (FDD pages 87–88)
What This Means (2025 FDD)
According to Benjamin Franklin Plumbing's 2025 Franchise Disclosure Document, the allowance for doubtful accounts was $5,757 as of December 31, 2023. This figure represents the company's estimate of the amount of accounts receivable that may not be collectible.
For a prospective Benjamin Franklin Plumbing franchisee, the allowance for doubtful accounts is an indicator of the credit risk associated with the company's accounts receivable. A higher allowance may suggest that a larger portion of the outstanding balances is considered potentially uncollectible. This could be due to various factors, such as economic conditions or the creditworthiness of customers.
In addition, during the year ended December 31, 2023, Benjamin Franklin Plumbing recognized bad debt expense of $3,123 and had write-offs of uncollectible accounts of $536. Bad debt expense represents the cost associated with accounts that are deemed uncollectible during the period, while write-offs are the actual amounts removed from the accounts receivable balance because they are considered uncollectible. Monitoring these figures can provide insights into the effectiveness of the company's credit and collection policies.