What was the approximate total amount of Coffee News receivables over 90 days in 2023?
Coffee_News Franchise · 2025 FDDAnswer from 2025 FDD Document
| December 31, 2024, 2023 and 2022 | ||||
|---|---|---|---|---|
| 2024 | 2023 | 2022 | ||
| ASSETS | ||||
| Current assets | ||||
| Cash | $ 64,135 | $ 66,796 | $ 94,422 | |
| Accounts receivable, net of reserve for current expected credit | ||||
| losses of $80,000 in 2024 and $120,000 in 2023 and 2022 | 26,049 | 38,558 | 23,979 | |
| Total current assets | 90,184 | 105,354 | 118,401 | |
| Other assets |
Source: Item 23 — Receipts (FDD pages 36–118)
What This Means (2025 FDD)
According to Coffee News's 2025 Franchise Disclosure Document, the accounts receivable, net of reserve for current expected credit losses of $120,000 in 2023 was $38,558. This figure represents the total amount of outstanding payments owed to Coffee News by its franchisees, minus an estimated amount that may not be collected. The credit loss reserve reflects Coffee News's anticipation of potential non-payments from franchisees.
For a prospective Coffee News franchisee, understanding the accounts receivable and the associated credit loss reserve is crucial. It provides insight into the financial health of Coffee News and the payment behavior of its franchisees. A high reserve for credit losses could indicate potential difficulties in collecting payments from franchisees, which might reflect broader challenges within the franchise system.
It is important to note that the FDD does not specify the portion of the $38,558 in receivables that are over 90 days past due. A prospective franchisee may want to inquire about the aging of these receivables to understand the timeliness of payments from franchisees. Understanding the collectability of receivables is essential for assessing the overall financial stability of Coffee News.