How does Bojangles account for marketing and maintenance supplies?
Bojangles Franchise · 2025 FDDAnswer from 2025 FDD Document
Inventories, net consist of food and paper products and are stated at lower of cost or net realizable value. The cost of inventories is determined on a first-in, first-out basis. The Company maintains a provision for inventory spoilage. Marketing and maintenance supplies are expensed as purchased.
Source: Item 22 — CONTRACTS (FDD page 82)
What This Means (2025 FDD)
According to Bojangles's 2025 Franchise Disclosure Document, marketing and maintenance supplies are expensed as purchased. This means that Bojangles does not keep track of these supplies as assets in their inventory. Instead, the cost of these items is immediately recorded as an expense on the income statement when they are bought.
For a prospective franchisee, this accounting practice implies that the initial investment for these supplies will be recognized as an immediate expense, impacting the early financial statements of the franchise. This approach simplifies bookkeeping for these types of supplies.
This is a common accounting practice for items that are not considered significant assets and are consumed relatively quickly. Franchisees should factor this into their budgeting and financial planning, understanding that these costs will be recognized upfront rather than depreciated over time.