What was the interest receivable for Central Bark Doggy Day Care as of December 31, 2023?
Central_Bark_Doggy_Day_Care Franchise · 2025 FDDAnswer from 2025 FDD Document
Trade accounts receivable represent monthly royalty and service fees collected from each franchise. Trade accounts receivable are recorded at the invoiced amount and do not bear interest. Trade receivables are typically outstanding for 30 days or less. Management evaluates the collectability of trade accounts receivable and records an allowance for credit losses representing the estimate of the expected losses that result from all possible default events over the expected life of the receivables. The Company estimates the allowance based on historical write-off experience and current relationships with customers. The allowance for credit losses as well as the provision for credit losses, write-off activity and recoveries for the years presented are not material to the financial statements.
Source: Item 1 — Franchisee shall have paid all Royalty Fees, advertising fund contributions, LAC contributions, amounts owed for purchases by Franchisee from Franchisor, or Franchisor's affiliates, and all other amounts owed to Franchisor, Franchisor's affiliates, and third-party creditors, and shall have submitted to Franchisor all required reports and statements; (FDD pages 106–233)
What This Means (2025 FDD)
According to Central Bark Doggy Day Care's 2025 Franchise Disclosure Document, the trade accounts receivable do not bear interest. The document states that trade accounts receivable represent monthly royalty and service fees collected from each franchise. These receivables are typically outstanding for 30 days or less. Management evaluates the collectability of these accounts and records an allowance for credit losses, estimating potential losses based on historical write-off experience and current customer relationships. However, the allowance for credit losses, provision for credit losses, write-off activity, and recoveries for the years presented were not material to the financial statements.
Because the receivables do not bear interest, there would be no interest receivable to report. The FDD does not specify a particular dollar amount for trade accounts receivable as of December 31, 2023. Instead, it focuses on the general accounting practices related to receivables and potential credit losses.
Prospective franchisees should be aware that while Central Bark Doggy Day Care extends credit to franchisees for royalty and service fees, these amounts are expected to be collected within a short timeframe. The immateriality of credit losses suggests that the company has been effective in managing its receivables. However, it would be prudent for potential franchisees to inquire about the typical amounts of outstanding receivables and the specific criteria used to determine the allowance for credit losses to gain a clearer understanding of the company's financial health and risk management practices.