Were there any write-offs of royalties receivable for Crave during the reporting period?
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. No write-offs were made in the reporting period.
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, no write-offs of royalties receivable were made during the reporting period. The document states that management considers receivables to be fully collectible. If amounts were to become uncollectible, they would be charged to operations during the period the determination is made.
Crave adheres to accounting principles generally accepted in the United States of America, which require the allowance method to recognize bad debts. However, the direct write-off method used by Crave does not materially differ from the allowance method. This indicates that Crave believes its franchisees are likely to pay their royalty fees and has not had to write off any uncollectible amounts.
For a prospective franchisee, this suggests that Crave has a healthy financial relationship with its franchisees and that franchisees are generally able to meet their financial obligations to the company. This could be a positive indicator of the overall financial stability and management practices of the Crave franchise system.