What was the credit loss expense related to doubtful accounts receivable for Crave Cookies in 2023?
Crave_Cookies Franchise · 2025 FDDAnswer from 2025 FDD Document
isting economic conditions. As of December 31, 2023 and 2022, there was no allowance for credit losses recorded.
Generally, the Company does not charge interest on past due accounts. Delinquent receivables are written off based on individual credit evaluation and specific circumstances of the customer. During the years ended December 31, 2023 and 2022, credit loss expense related
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 47)
What This Means (2025 FDD)
According to Crave Cookies' 2025 Franchise Disclosure Document, the credit loss expense related to doubtful accounts receivable was $5,000 in 2023. This expense represents the amount Crave Cookies set aside to cover potential losses from customers who may not pay their outstanding balances. In 2022, Crave Cookies did not record any credit loss expense.
This information is found within the notes to the financial statements, specifically addressing accounting policies related to accounts receivable. Crave Cookies states that they evaluate outstanding receivables, historical collection data, and current economic conditions to determine the appropriate allowance for credit losses. The fact that a $5,000 expense was recorded in 2023, while none was recorded in 2022, suggests there may have been a change in the collectability of receivables or a change in the company's assessment of credit risk during that period.
For a prospective franchisee, this indicates that Crave Cookies does encounter some level of uncollectible accounts. While $5,000 may not be a large amount, it's a factor to consider when evaluating the company's financial performance and risk management practices. It would be prudent for a potential franchisee to inquire about the specific circumstances that led to this credit loss expense and the measures Crave Cookies takes to minimize such losses in the future.