What was the provision for credit losses for Boulder Designs in 2024?

According to Boulder Designs' 2025 Franchise Disclosure Document, the provision for credit losses in 2024 was $86,025. This figure represents an estimate of potential losses from uncollectible franchise fees receivable. For comparison, the provision for credit losses in 2023 was $30,799, and in 2022 it was $13,287.

The allowance for credit losses is Boulder Designs' best estimate of potential credit losses from existing receivables. The company reviews this allowance monthly, specifically examining balances past due over 90 days and exceeding a specified amount for collectability. After exhausting all collection methods and determining that recovery is unlikely, account balances are charged off against the allowance.

Prospective franchisees should understand how Boulder Designs manages and accounts for potential credit losses, as this can impact the franchisor's financial stability and ability to support its franchisees. A significant increase in the provision for credit losses could indicate potential issues with franchisees meeting their financial obligations.

The table in the FDD provides a summary of activity in the allowance for credit losses from January 1, 2023, to December 31, 2024, including the beginning and end of period balances, charge-offs, recoveries, and the provision for credit losses. This information can be useful in assessing the credit risk associated with Boulder Designs' franchise system.