How does Chocolate Bash report franchisee receivables?
Chocolate_Bash Franchise · 2024 FDDAnswer from 2024 FDD Document
months or less when purchased.
Franchisee Receivables
The Company's franchisee receivables primarily result from initial franchise fees, royalty fees, brand development contributions and training fees charged to franchisees. Timing of revenue recognition may be different from the timing of invoicing to customers. The Company records an accounts receivable when revenue is recognized prior to invoicing, or unearned revenue when revenue is recognized after invoicing. The 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, franchisee receivables primarily come from initial franchise fees, royalty fees, brand development contributions, and training fees charged to franchisees. Chocolate Bash recognizes revenue at different times than when they invoice their franchisees. They record accounts receivable when revenue is recognized before invoicing and unearned revenue when revenue is recognized after invoicing. The company reports these receivables at net realizable value.
Chocolate Bash determines the allowance for doubtful accounts based on historical losses, current expectations, and economic conditions. They analyze delinquent accounts receivable on a continuing basis, 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.
As of December 31, 2023, December 31, 2022, and December 31, 2021, Chocolate Bash determined that an allowance on outstanding franchisee receivables of $0 was necessary. Franchisee bad debt expense was $0 for the year ended December 31, 2023, December 31, 2022, and December 31, 2021. Additionally, franchisee amounts written off were $0 for the year ended December 31, 2023, December 31, 2022, and December 31, 2021.