How does Crave handle accounts receivable that become uncollectible?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
Management considers receivables to be fully collectible. If amounts become uncollectible, they are charged to operations in the period in which that determination is made. Accounting principles generally accepted in the United States of America require that the allowance method be used to recognize bad debts; however, the effect of using the direct write-off method is not materially different from the results that would have been obtained under the allowance method. For the period ended December 31, 2024, there were no write-offs and no allowance deemed necessary.
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, management considers accounts receivable to be fully collectible. However, if amounts become uncollectible, Crave charges those amounts to operations in the period the determination is made.
The FDD notes that accounting principles generally accepted in the United States of America require the allowance method to be used to recognize bad debts. However, Crave states that using the direct write-off method does not materially differ from the results obtained under the allowance method.
For the period ending December 31, 2024, Crave did not have any write-offs and did not deem an allowance necessary. This indicates that, at least for the period specified, Crave did not experience issues with uncollectible accounts receivable.