When does Counselor Realty write off receivables?
Counselor_Realty Franchise · 2025 FDDAnswer from 2025 FDD Document
t rates and interest rates, amongst others.
Accounts receivable consists of franchise related fees. Accounts receivable are unsecured and the Company charges 8% interest on past due accounts. Accounts receivable are considered past due if not paid within the terms established. Accounts receivable are written off when they are determined to be uncollectible. The allowance for credit losses was $1,574 and $3,724 as of December 31, 2024 and 2023, respectively.
Revenue From Contracts
The Company's revenues are comprised of initial franchise fees and monthly franchise and metro advertising fees. Initial franchise fees are a onetime fee paid by new franchisees and are recognized over the term of the contract, in the period earned. Monthly franchise and metro advertising fees are billed monthly a
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 32)
What This Means (2025 FDD)
According to Counselor Realty's 2025 Franchise Disclosure Document, accounts receivable, which consist of franchise related fees, are written off when they are determined to be uncollectible. Counselor Realty's accounts receivable are unsecured, and the company charges 8% interest on past due accounts. Accounts receivable are considered past due if they are not paid within the established terms.
The document also states that Counselor Realty recognizes an allowance for credit losses for trade and other receivables to present the net amount expected to be collected as of the balance sheet date. This allowance is based on the credit losses expected to arise over the life of the asset, considering past events, historical loss experience, current events, and future expectations as of the balance sheet date.
Counselor Realty pools its receivables based on similar risk characteristics when estimating expected credit losses. If a receivable does not share the same risk characteristics with other receivables, it is measured individually. The company continuously evaluates these pooling decisions and adjusts them as needed when risk characteristics change. The allowance for credit losses was $1,574 and $3,724 as of December 31, 2024 and 2023, respectively.
Counselor Realty utilizes the aging method to determine lifetime expected credit losses on its receivables. This method calculates an estimate of losses based primarily on the company's historical loss experience. In determining loss rates, Counselor Realty evaluates information related to historical losses, adjusted for current conditions and further adjusted for the period of time that can be reasonably forecasted. Qualitative and quantitative adjustments related to current conditions and the reasonable and supportable forecast period consider factors such as past due receivables, customer creditworthiness, changes in the terms of receivables, and the effect of external forces like competition and legal/regulatory requirements.