What was the expense (benefit) for the allowance for doubtful accounts for Budget in 2023?
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 expense (benefit) for the allowance for doubtful accounts in 2023 was $1 million. This figure represents the change in the estimated amount of uncollectible receivables that Budget recorded during that year.
For a prospective Budget franchisee, understanding the allowance for doubtful accounts is crucial because it reflects the credit risk associated with customers who owe money to the business. An increase in this allowance suggests that Budget anticipates a higher likelihood of customers not paying their debts, which could impact the franchisee's revenue and profitability.
It's important to note that the amounts are expressed in millions, so the $1 figure represents a significant sum. Franchisees should inquire about Budget's credit policies, customer payment history, and strategies for managing and minimizing doubtful accounts to better assess the financial health and stability of the franchise system.