What was the allowance on outstanding franchisee receivables for Chocolate Bash as of December 31, 2021?
Chocolate_Bash Franchise · 2024 FDDAnswer from 2024 FDD Document
Company reports these receivables at net realizable value.
Management determines the allowance for doubtful accounts based on historical losses, current expectations, and economic conditions. On a continuing basis, management analyzes delinquent accounts receivable and, once these accounts receivable are determined to be uncollectible, they are written off through a charge against an existing allowance account. The allowance account is reviewed regularly and adjusted against earnings as appropriate. The Company determined that an allowance on outstanding franchisee receivables of $0 was necessary as of December 31, 2023, December 31, 2022, & December 31, 2021. Franchisee bad debt expense was $0 for the year ended December 31, 2023, December 31, 2022, & December 31, 2021. Franchisee amounts written off were $0 for the year ende
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 38)
What This Means (2024 FDD)
According to Chocolate Bash's 2024 Franchise Disclosure Document, the company determined that an allowance on outstanding franchisee receivables of $0 was necessary as of December 31, 2021. This means that Chocolate Bash did not consider any of the outstanding payments from franchisees to be uncollectible as of that date. The company's management regularly reviews accounts receivable and adjusts the allowance account against earnings as needed.
For a prospective franchisee, this indicates that Chocolate Bash has historically not had issues with franchisees failing to pay their dues. It also suggests that Chocolate Bash has been proactive in managing and collecting franchisee receivables.
It is important to note that this is a snapshot in time and that future financial performance may vary. However, the historical data can provide some comfort to potential franchisees that Chocolate Bash has a solid track record of managing its finances and franchisee relationships.