Did Chatime have an allowance for doubtful accounts at the end of 2023 and 2024?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
| 2024 | 2023 | |
|---|---|---|
| Point in time: Franchise fees | $ 10,000 | $ _ |
| Royalties and marketing fund fees | 88,993 | |
| Total point in time | 98,993 | - |
| Over time: Franchise fees | ||
| 42,531 | 2,706 | |
| Total revenues | $ 141,524 | $ 2,706 |
Contract balances
Contract assets include accounts and franchise fees receivable. The balances, net of allowan
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, the company did not have an allowance for doubtful accounts at the end of 2023, but it did in 2024. The FDD states that contract assets, which include accounts and franchise fees receivable, are shown net of allowance for doubtful accounts. As of December 31, 2024, the balance, net of allowance for doubtful accounts, was $205,053.
However, the document explicitly states that there were no contract assets as of December 31, 2023. This implies that Chatime did not maintain an allowance for doubtful accounts during that year.
For a prospective franchisee, this information is relevant in understanding how Chatime manages its receivables and potential bad debts. The presence of an allowance for doubtful accounts in 2024 suggests that Chatime recognizes the risk that some accounts receivable may not be fully collectible. The absence of such an allowance in 2023 could indicate a different approach to managing receivables or simply reflect that there were no receivables considered doubtful at that time.