How does Cr3 American Exteriors determine the estimate for doubtful receivables?
Cr3_American_Exteriors Franchise · 2025 FDDAnswer from 2025 FDD Document
s are deposits in-transit from banks for payments related to third-party credit card and debit card transactions.
Financial Instruments
For certain of the Company's financial instruments, including cash and cash equivalents, accounts receivable, long term notes receivable, accounts payable and accrued expenses, the carrying amounts approximate fair value due to their short maturities.
Accounts Receivab
Source: Item 23 — RECEIPTS (FDD pages 53–150)
What This Means (2025 FDD)
According to Cr3 American Exteriors' 2025 Franchise Disclosure Document, the company records accounts receivable for amounts due based on the terms of executed franchise agreements for franchise sales, royalty fees, and other revenues. These receivables are carried at the original invoice amount, less an estimate made for doubtful receivables. This estimate is based on a review of outstanding amounts.
As of December 31, 2024, Cr3 American Exteriors had accounts receivables of $312,709, and all accounts were deemed collectible at that time. This indicates that Cr3 American Exteriors management reviews outstanding invoices and uses their judgment to determine if any amounts are unlikely to be collected.
For a prospective franchisee, this means that Cr3 American Exteriors assesses the creditworthiness and payment history of its franchisees and other debtors to estimate potential losses from uncollectible accounts. The fact that all accounts were deemed collectible as of the end of 2024 suggests a conservative approach to revenue recognition and a healthy financial position for the franchisor.