What was the allowance for credit losses for Counselor Realty as of December 31, 2024?

According to Counselor Realty's 2025 Franchise Disclosure Document, the allowance for credit losses was $1,574 as of December 31, 2024. In the previous year, December 31, 2023, the allowance for credit losses was $3,724. This allowance represents the amount of accounts receivable that Counselor Realty estimates may not be collectible. These accounts receivable primarily consist of franchise-related fees. Counselor Realty charges 8% interest on past due accounts, and accounts receivable are written off when deemed uncollectible.

The allowance for credit losses is an accounting estimate that reflects the potential risk of non-payment from franchisees. A lower allowance for credit losses in 2024 compared to 2023 could indicate that Counselor Realty expects to collect a higher percentage of its outstanding receivables. This could be due to improved financial health of franchisees, more effective collection efforts, or changes in the composition of accounts receivable.

Prospective franchisees should understand how Counselor Realty manages its accounts receivable and determines the allowance for credit losses. It is important to inquire about the criteria used to assess the creditworthiness of franchisees and the procedures for collecting overdue payments. Understanding these practices can provide insights into the financial stability of Counselor Realty and its relationship with its franchisees.