What was the balance of the Allowance for Doubtful Accounts at the beginning of the period for Budget as of December 31, 2022?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
ed average interest rate of 8.01%. These notes were issued under previously outstanding series of debt.
In February 2025, we borrowed $500 million under a floating rate term loan due December 2025, which is part of our senior revolving credit facilities.
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Schedule II – Valuation and Qualifying Accounts
| (in millions) Description | Balance of | at Beginning Period | Expe | nse (Benefit) | Other Adjustments (a) | _ | Deductions | Balance at End of Period |
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Source: Item 21 — FINANCIAL STATEMENTS (FDD page 79)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, the balance of the Allowance for Doubtful Accounts at the beginning of the period for the year ended December 31, 2022, was $84 million. This figure represents Budget's estimate of the amount of accounts receivable that may not be collectible.
For a prospective Budget franchisee, understanding the Allowance for Doubtful Accounts is crucial because it reflects the credit risk associated with the business. A higher allowance might indicate a more conservative approach to revenue recognition or potential issues with customer payments. Conversely, a lower allowance could suggest a more optimistic outlook on collectibility.
It's important to note that this is a consolidated figure for Budget as a whole and may not directly reflect the experience of an individual franchise location. However, it provides insight into the overall financial health and risk management practices of the company. Franchisees should inquire about the specific credit policies and collection procedures they will be expected to follow, as well as any support provided by Budget in managing accounts receivable.