Were there any write-offs or allowances deemed necessary for Crave's accounts receivable for the period ended December 31, 2024?
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, for the period ended December 31, 2024, there were no write-offs or allowances deemed necessary for its accounts receivable. This indicates that Crave considered all receivables to be fully collectible during that period. The company charges uncollectible amounts to operations in the period the determination is made.
Crave's accounting practices follow generally accepted accounting principles (GAAP) in the United States. While GAAP requires the allowance method to recognize bad debts, Crave states that using the direct write-off method does not materially differ from the allowance method in their case. This suggests that the potential difference between the two methods is insignificant for Crave's financial reporting.
For a prospective franchisee, this information provides insight into Crave's financial management and the quality of its receivables. The absence of write-offs or allowances may indicate effective credit policies and a healthy financial relationship with its franchisees. However, it is important for potential franchisees to independently verify these figures and assess the overall financial health of Crave before making an investment decision.