What was the change in accounts receivable for Carbones Pizzeria for the year ended October 31, 2022?
Carbones_Pizzeria Franchise · 2025 FDDAnswer from 2025 FDD Document
t expires, the franchise may pay an additional franchise fee to renew the agreement. The contract term for franchise renewal agreements is 10 years. There were no initial and renewal franchise fees in the year ended October 31, 2022.
Notes to Consolidated Financial Statements As of and For the Year ended October 31, 2022
A. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED
Revenue recognition (Continued)
Company Restaurant Sales
The Company earns revenue from sales at the Company owned restaurant and is recognized at the time of sale.
Advertising
In accordance with signed franchise agreements, franchisees contribute royalties to an advertising fund. The fund is to be used to maximize public recognition of Carbone's Pizzeria.
Advertising costs are expensed as incurred. Advertising and promotion expense is approximately $506,000 for the year ended October 31, 2022.
Income Taxes
M&T, C&S and CPI are corporations and provide for income taxes based on income reported for financial reporting purposes. Certain revenue and charges to earnings differ as to timing from those deducted for tax purposes; these relate primarily to allowances for doubtful receivables, accrued liabilities, depreciation, and net operating loss carryforwards. The tax effects of these differences are recorded as deferred income taxes.
The Company's policy is to evaluate the likelihood that its uncertain tax positions will prevail upon examination based on the extent to which those positions have substantial support within the IRC and Regulations, Revenue Rulings, court decisions, and other evidence. The federal and state income tax returns of the Company are subject to examination by the income taxing authorities, generally for three years after they were filed. Interest and penalties, if any, assessed by income taxing authorities, will be recorded in operating expenses.
In preparing consolidated financial statements in conformity with accounting principles generally accepted in the United States of America ("US GAAP"), management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements, as well as the reported amounts
Source: Item 22 — CONTRACTS (FDD page 30)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, the information regarding the specific change in accounts receivable for Carbones Pizzeria for the year ended October 31, 2022, is not available. While the document includes notes to the consolidated financial statements as of and for the year ended October 31, 2022, it does not provide the specific figures for accounts receivable. Instead, it broadly discusses accounting policies, revenue recognition, advertising expenses, and income taxes. The notes do mention allowances for doubtful receivables as one of the items that may differ between financial reporting and tax purposes. However, the exact figures are not present.
Without specific figures, prospective franchisees cannot assess the financial health and stability of Carbones Pizzeria regarding its accounts receivable. Understanding the changes in accounts receivable is crucial for evaluating the company's efficiency in collecting payments and managing credit risks. A significant increase in accounts receivable could indicate potential issues with collecting payments from franchisees or customers, which could impact the franchisor's cash flow.
To gain a clearer understanding, a prospective franchisee should directly ask the franchisor for the specific figures related to accounts receivable for the year ended October 31, 2022. Additionally, it would be beneficial to request a comparative analysis of accounts receivable over several years to identify any trends or potential concerns. Understanding the franchisor's policies on credit and collections, as well as the aging of accounts receivable, would also provide valuable insights.