What were the provisions for allowance for credit losses for Big Blue Swim School in 2023?

According to Big Blue Swim School's 2025 Franchise Disclosure Document, the company recorded an allowance for credit losses of $100,000 as of December 31, 2023. This allowance is maintained for estimated losses resulting from the inability of some franchisees to make required payments.

Big Blue Swim School assesses the collectability of accounts receivable and contract assets by reviewing them on a collective basis, considering historical collectability and making judgments about the creditworthiness of franchisees. They also take into account current market conditions and forecasts of future economic conditions to determine the appropriate allowance for doubtful accounts. Uncollectible accounts are written off when all collection efforts have been exhausted.

For a prospective franchisee, this indicates that Big Blue Swim School acknowledges the risk of franchisees defaulting on payments and sets aside funds to cover potential losses. This practice is common in franchising, as franchisors often extend credit to franchisees or rely on them for ongoing royalty payments. The allowance for credit losses suggests that Big Blue Swim School has experienced some level of non-payment or delayed payment from its franchisees and is proactively managing this risk.