Does the Churchs Chicken FDD include any footnotes related to the financial statements?
Churchs_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
c financial institutions. In certain instances, cash on deposit exceeds federally insured limits.
2312-4393389
Cajun Global LLC and Subsidiaries
Notes to Consolidated Financial Statements (continued)
3. Summary of Significant Accounting Policies (continued)
Restricted Cash
Certain cash accounts are required to be maintained by the 2021 Securitization (described in Note 8, Long-term debt), its indenture, and other related agreements. These cash accounts may be used only for the purposes specified in the 2021 Securitization Agreements. The Company has presented these cash accounts as Restricted cash in the current asset section on the consolidated balance sheets based upon the expected date of cash distribution.
Accounts Receivable, Net
Accounts receivable, net consist primarily of amounts due from franchisees related to royalties, rents, and various miscellaneous items and are generally due within 14 days following each week's sales pursuant to franchise agreements. Receivables that exceed the payment terms extended by the Company are considered delinquent. The allowance for doubtful accounts is calculated based on historical experience, management's judgement regarding the Company's ability to collect, as well as the age of the accounts receivable, current market conditions and reasonable forecasts.
At December 31, 2023 and December 25, 2022, accounts receivable that were presented on the consolidated balance sheets were net of allowances for doubtful accounts of $1.1 million and $1.3 million, respectively. The Company does not require collateral from franchisees but does have minimum financial criteria for new franchisees.
Accounts receivable are charged off against the allowance for doubtful accounts when it is probable the accounts receivable will not be collected.
Inventory
Inventory consists principally of food, beverage items, and supplies, which are carried at the lower of cost (determined on a first-in, first-out basis) or net realizable value.
Advertising Funds
The Company's franchise agreements for all restaurants owned by the Parent, the Company, domestic franchisees, and certain international franchisees, including all franchisees in Puerto Rico, require participation and contributions of a percentage of their gross sales
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 67)
What This Means (2025 FDD)
According to the 2025 Churchs Chicken FDD, Item 11 includes a section titled "Cajun Global LLC and Subsidiaries Notes to Consolidated Financial Statements (continued)". This section provides additional details regarding specific accounting policies. One note discusses restricted cash accounts required by the 2021 Securitization, its indenture, and related agreements, specifying that these accounts can only be used for purposes outlined in the Securitization Agreements. The company presents these accounts as restricted cash in the current asset section of the consolidated balance sheets, based on the expected date of cash distribution.
Another note addresses accounts receivable, net, which primarily consist of amounts due from franchisees for royalties, rents, and miscellaneous items, typically due within 14 days of each week's sales. Receivables exceeding these payment terms are considered delinquent. The allowance for doubtful accounts is calculated using historical experience, management's judgment, the age of the receivables, current market conditions, and reasonable forecasts. As of December 31, 2023, and December 25, 2022, accounts receivable were presented net of allowances for doubtful accounts of $1.1 million and $1.3 million, respectively. Churchs Chicken does not require collateral from franchisees but has minimum financial criteria for new franchisees. Accounts receivable are charged off against the allowance when collection is deemed improbable.
Additionally, the notes cover inventory, which mainly includes food, beverage items, and supplies, valued at the lower of cost (determined on a first-in, first-out basis) or net realizable value. The notes also describe advertising funds, stating that franchise agreements for restaurants owned by the Parent, the Company, domestic franchisees, and certain international franchisees (including those in Puerto Rico) require contributions of a percentage of their gross sales to an advertising fund administered by Church's Chicken Advertising Fund.