How does Better Homes And Gardens Real Estate manage counterparty credit risk?
Better_Homes_And_Gardens_Real_Estate Franchise · 2025 FDDAnswer from 2025 FDD Document
The Company is exposed to counterparty credit risk in the event of nonperformance by counterparties to various agreements and sales transactions. The Company manages such risk by evaluating the financial position and creditworthiness of such counterparties and by requiring collateral in instances in which financing is provided. The Company mitigates counterparty credit risk associated with its derivative contracts by monitoring the amounts at risk with each counterparty to such contracts, periodically evaluating counterparty creditworthiness and financial position, and where possible, dispersing its risk among multiple counterparties.
As of December 31, 2024, there were no significant concentrations of credit risk with any individual counterparty or a group of counterparties. The Company actively monitors the credit risk associated with the Company's receivables.
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 75–76)
What This Means (2025 FDD)
According to Better Homes And Gardens Real Estate's 2025 Franchise Disclosure Document, the company is exposed to counterparty credit risk if the other parties involved in agreements and sales transactions fail to perform. To manage this risk, Better Homes And Gardens Real Estate evaluates the financial position and creditworthiness of these counterparties. In situations where financing is provided, the company requires collateral.
Better Homes And Gardens Real Estate also mitigates credit risk related to its derivative contracts by monitoring the amounts at risk with each counterparty. The company periodically assesses the creditworthiness and financial position of these counterparties. Where possible, Better Homes And Gardens Real Estate disperses its risk among multiple counterparties to further reduce potential losses.
As of December 31, 2024, Better Homes And Gardens Real Estate reported that there were no significant concentrations of credit risk with any single counterparty or group of counterparties. The company actively monitors the credit risk associated with its receivables to ensure that potential issues are addressed promptly. This proactive approach helps Better Homes And Gardens Real Estate maintain financial stability and minimize losses from non-performance by other parties.