What were the accounts receivable from franchisees for Burros Fries on January 1, 2022 and December 31, 2022?
Burros_Fries Franchise · 2024 FDDAnswer from 2024 FDD Document
31, 2022, therefore the allowance for doubtful accounts is zero.
Franchise fees receivable are the result of short-term financing of franchise fees due upon signing the franchise agreement. Net receivables from franchisees for franchise fees were $8,750 at January 1, 2022 and $0 at December 31, 2022. Accounts receivable from franchisees
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 53)
What This Means (2024 FDD)
According to Burros Fries's 2024 Franchise Disclosure Document, the accounts receivable from franchisees were detailed in the notes to the financial statements. These receivables represent the amounts Burros Fries was owed by its franchisees. Management of Burros Fries considers all receivables to be collectible, so there was no allowance for doubtful accounts recorded as of December 31, 2022.
Specifically, the net receivables from franchisees for franchise fees were $8,750 as of January 1, 2022, and $0 as of December 31, 2022. In addition to franchise fees, Burros Fries also had accounts receivable from franchisees totaling $12,442 as of January 1, 2022, and $22,863 as of December 31, 2022.
For a prospective franchisee, understanding the accounts receivable can provide insight into the financial interactions between Burros Fries and its franchisees. The increase in accounts receivable from January 1, 2022 to December 31, 2022 may indicate a change in payment patterns or an increase in services provided to franchisees on credit. It is important to note that these figures only reflect receivables and do not indicate the overall financial health or profitability of individual franchise locations.