What is the net value of Closet Storage Concepts' accounts receivable?

According to Closet Storage Concepts' 2025 Franchise Disclosure Document, accounts receivable primarily consist of amounts due from franchisees for royalties and National Advertising Program revenues. Closet Storage Concepts extends credit to customers and franchisees that management has determined to be credit-worthy. For the year ended December 31, 2024, the company recognized $52,587 in allowance for credit losses on receivables arising from franchise royalties and advertising contributions from franchisees.

This means that Closet Storage Concepts assesses the creditworthiness of its franchisees before extending credit, which is a standard practice in franchising to minimize financial risk. The allowance for credit losses indicates the company's estimate of uncollectible accounts receivable, which is a normal part of doing business. The $52,587 allowance suggests that Closet Storage Concepts anticipates some franchisees may not fully pay their royalty and advertising fees.

For a prospective franchisee, this information highlights the importance of understanding the payment terms for royalties and advertising fees. It also suggests that Closet Storage Concepts has a system in place to manage and account for potential credit losses. While the document does not explicitly state the total value of accounts receivable, it does provide insight into how Closet Storage Concepts manages its receivables and accounts for potential losses.