What was the bad debt expense for Craters & Freighters in the later of the two years presented?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
| Adjustments to Reconcile Net Income to Net Cash and Cash Equivalents | ||
|---|---|---|
| From Operating Income: | ||
| Amortization Expense | 101,989 | 99,763 |
| Depreciation Expense | 26,134 | 21,995 |
| Gain on Sale of Fixed Assets | (15,729) | - |
| Gain on Sale of Marketable Securities | (841) | (3,643) |
| Bad Debt Expense | 10,000 | 24,928 |
| Non-Cash Lease Expense | 1,865 | 83,132 |
| Unrealized Holding (Gain) Loss on Marketable Securities | (97,174) | 69,301 |
| Reinvested Dividends | (13,827) | (13,279) |
| (Increase) Decrease in Assets: | ||
| Accounts Receivable | 138,330 | (159,098) |
| Prepaid Expenses and Deposits | (166,615) | 462 |
| (Decrease) Increase in Liabilities: | ||
| Accounts Payable | (179,894) | 225,116 |
| Accrued Bonus | (132,340) | 132,340 |
| Accrued Liabilities and Payables | 1,332 | (3,152) |
| Operating Lease Liability Change | - | (70,918) |
| Net Cash Flows from Operating Activities | 2,306,460 | 2,844,694 |
Source: Item 23 — RECEIPTS (FDD pages 50–193)
What This Means (2025 FDD)
According to the 2025 Craters & Freighters Franchise Disclosure Document, the bad debt expense for the company can be found within the adjustments to reconcile net income to net cash and cash equivalents from operating income. The document presents figures for two years.
For the later year, Craters & Freighters reported a bad debt expense of $24,928. This figure represents the estimated amount of accounts receivable that the company believes will not be collected.
Prospective franchisees should understand that bad debt expense is a normal part of doing business, especially when offering credit terms to customers. Monitoring and managing accounts receivable, as well as implementing effective credit policies, are important for minimizing bad debt expense and maintaining healthy cash flow. Franchisees may want to inquire about Craters & Freighters's specific procedures and support for managing credit and collections.