How does Card My Yard determine the allowance for credit losses on franchisee accounts receivable?

According to Card My Yard's 2025 Franchise Disclosure Document, the allowance for credit losses on franchisee accounts receivable is determined based on the company's historical experience with franchisees. This involves considering both the age of the receivable and the franchisee's ability to pay. Accounts are written off when they are deemed uncollectible, and all reasonable efforts to collect the receivable have been exhausted. The accounts receivable do not include any amounts for interest.

For a prospective Card My Yard franchisee, this means that the franchisor actively manages and monitors the accounts receivable from franchisees, taking into account payment history and financial stability when assessing potential credit losses. This process helps Card My Yard maintain accurate financial records and manage risk effectively. Franchisees should be aware that their payment behavior directly impacts how the franchisor assesses credit losses, and consistent, timely payments are essential.

This approach is fairly standard in the franchise industry, where franchisors must manage financial relationships with numerous franchisees. By using historical data and assessing individual franchisee circumstances, Card My Yard aims to strike a balance between supporting franchisees and protecting its financial interests. Franchisees benefit from a clear and consistent payment process, while Card My Yard can maintain a healthy financial position by proactively managing potential credit losses.