Where are credit losses recorded in Checkersrallys' consolidated statements of operations?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
ine if collectability is reasonably assured. If we determine that certain amounts are not probable of collection, we do not recognize the related royalty revenue. The Company writes off the related accounts receivable when it is determined that they are uncollectible.
Credit losses are recorded in general and administrative expenses in the accompanying consolidated statements of operations. The Company had
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 91)
What This Means (2025 FDD)
According to Checkersrallys' 2025 Franchise Disclosure Document, credit losses are recorded as part of general and administrative expenses within the company's consolidated statements of operations. This means that when Checkersrallys experiences losses from uncollectible accounts, these losses are categorized under the broader umbrella of general and administrative costs, which also includes salaries, office expenses, and other overhead.
For the fiscal year ended December 30, 2024 (Successor), Checkersrallys reported credit losses of $0.6 million. Additionally, for the periods from June 17, 2023 through January 1, 2024 (Successor) and from January 3, 2023 through June 16, 2023 (Predecessor), the company had credit losses of $0.1 million in each period.
This accounting practice is fairly standard, as general and administrative expenses often serve as a catch-all for costs not directly tied to revenue generation. Franchisees should be aware that these credit losses can impact the overall financial health of Checkersrallys, potentially affecting the resources available for franchisee support, marketing, and brand development. Monitoring these figures over time can provide insights into the financial stability and risk management practices of the franchisor.