What was the allowance for credit losses for Cicis in 2024?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
| (2,889,567) | | Net income | 4,210,079 | | | | | Balance, December 31, 2024 | $ 2,423,224 |
Combined Statements of Cash Flows Years Ended December 31, 2024 and 2023
| 2024 | 2023 | |
|---|---|---|
| Cash flows from operating activities: | ||
| Net income | $ 4,210,079 | $ 5,859,705 |
Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 58–64)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, the allowance for credit losses in 2024 was $30,166. This figure represents the company's estimate of potential losses from uncollectible accounts receivable. In 2023, the allowance for credit losses was $0.
Cicis calculates this allowance using the CECL (current expected credit loss) methodology, which is applied to financial assets like accounts receivable. This methodology involves assessing historical loss patterns, the age of outstanding billings, and the risk associated with specific accounts. The allowance is essentially a reserve that Cicis sets aside to cover potential bad debts.
For a prospective franchisee, this information provides insight into how Cicis manages its accounts receivable and anticipates potential credit losses. The allowance for credit losses can fluctuate based on various factors, including changes in economic conditions, the creditworthiness of franchisees, and the effectiveness of Cicis's collection efforts. A significant increase in this allowance could indicate a higher risk of uncollectible accounts, which could impact Cicis's financial performance.