Do the Crave Cookies financial statements include any discussion of the impact of seasonality?
Crave_Cookies Franchise · 2025 FDDAnswer from 2025 FDD Document
Note 1: Nature of Operations and Summary of Significant Accounting Policies
Nature of Operations
Crave Cookies Franchising, LLC (the Company) formed on February 15, 2021 under the laws of the state of Utah as a Utah corporation.
The Company is a franchise company for Crave Cookies locations. The Company grants franchisees the right to operate a physical storefront location using the Crave Cookies name and marks.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Accounts Receivable
Accounts receivable are stated at the amount of consideration from customers of which the Company has an unconditional right to receive. The Company provides an allowance for doubtful accounts, which is based upon a review of outstanding receivables, historical collection information and existing economic conditions. As of December 31, 2022 and 2021, there was no allowance for doubtful accounts 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. No bad debt expense was recorded in 2022 or 2021.
Inventories
Inventories consist of cookie boxes. Inventories are stated at the lower of cost or net realizable value. Costs of cookie boxes are determined using the first-in, first-out (FIFO) method.
Notes Receivable - Related Party
Notes receivable represent amounts due from a related party for operating expenses and other fees that the Company paid on behalf of the related party. The terms of the note are non-interest bearing and due on demand. The related party is owned 100% by the owners of the Company.
Prepaid Expenses
Prepaid expenses include prepayment for subscriptions and other prepaid expenses.
Property and Equipment
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 47)
What This Means (2025 FDD)
Based on the 2025 Crave Cookies Franchise Disclosure Document, the provided financial statement notes do not include a specific discussion regarding the impact of seasonality on the Crave Cookies business. The notes primarily focus on the nature of operations, accounting policies, estimates, receivables, inventories, related-party transactions, and property and equipment. These are standard disclosures in financial statements.
While the notes do address factors like economic conditions in the context of accounts receivable and credit losses, they do not explicitly mention how seasonal variations in demand might affect Crave Cookies's revenue, costs, or overall financial performance. Seasonality can be a significant factor for businesses like cookie shops, where sales may fluctuate during holidays, school breaks, or different times of the year.
A prospective Crave Cookies franchisee should inquire with the franchisor about any internal analyses or data they have regarding seasonal sales patterns and how these patterns might impact inventory management, staffing, and overall profitability. Understanding these seasonal trends is crucial for effective business planning and financial forecasting.