Do the Crave Cookies financial statements include any discussion of the impact of technological change?
Crave_Cookies Franchise · 2025 FDDAnswer from 2025 FDD Document
See accompanying notes and independent accountants' audit report
Notes to the Financial Statements
Note 1 - Organization and Summary of Significant Accounting Policies
Organization - 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.
Concentrations of Credit Risk - Financial instruments which potentially subject the Company to concentration of credit risk consist primarily of receivables. In the normal course of business, the Company provides credit terms to its customers. Accordingly, the Company performs ongoing credit evaluations of its customers and maintains allowances for possible losses which, when realized, have been within the range of management's expectations.
The Company maintains its cash in bank deposit accounts which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk with respect to cash and cash equivalents. As of December 31, 2024 the Company did not have cash balances over the federally insured limit.
Cash and Cash Equivalents - For purposes of the statement of cash flows, the Company considers all short-term investments with an original maturity of three months or less to be cash equivalents.
Contract receivables - 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 credit losses, which is based upon a review of outstanding receivables, historical collection information and existing economic conditions. As of December 31, 2024, there was no allowance for credit losses recorded.
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 explicitly discuss the impact of technological change on the company's financial position or future prospects. The notes primarily focus on standard accounting practices, such as the use of estimates, accounts receivable, inventory valuation, related-party transactions, and prepaid expenses. They also cover potential credit risks, cash management, and the handling of legal claims.
While the notes address potential risks and uncertainties that could affect Crave Cookies's financial performance, such as credit risk and legal claims, they do not specifically mention how technological advancements or disruptions might impact the business. This could include changes in consumer preferences, the emergence of new competitors using different technologies, or the need for Crave Cookies to invest in new technologies to remain competitive.
A prospective Crave Cookies franchisee should consider asking the franchisor directly about their assessment of technological risks and opportunities. Understanding how Crave Cookies plans to adapt to and leverage new technologies in areas like online ordering, marketing, and operations is crucial for evaluating the long-term viability of the franchise. It would be prudent to inquire about any strategic plans or investments the company has in place to address technological changes and maintain a competitive edge in the market.
In summary, while the financial statements provide a snapshot of Crave Cookies's financial health and accounting practices, they do not offer insights into how the company is preparing for or managing the potential impacts of technological change. This is an important area for further investigation by potential franchisees.