Do the Crave Cookies financial statements include notes to the financial statements?
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)
According to Crave Cookies's 2025 Franchise Disclosure Document, the financial statements include accompanying notes. These notes offer additional context and details about the figures presented in the core financial statements, such as the balance sheets, income statements, and cash flow statements.
The notes cover various aspects of Crave Cookies's financial operations and accounting practices. For example, they describe the company's nature of operations, explaining that Crave Cookies Franchising, LLC was formed in Utah on February 15, 2021, and operates as a franchise company granting franchisees the right to operate physical storefront locations under the Crave Cookies name. The notes also discuss the use of estimates in preparing the financial statements, which is a standard accounting practice that involves management making assumptions that could affect the reported amounts.
Furthermore, the notes address specific elements such as accounts receivable, inventories (cookie boxes), notes receivable from related parties, prepaid expenses, and property and equipment. For instance, the notes clarify that accounts receivable are stated at the amount of consideration from customers and that Crave Cookies provides an allowance for credit losses based on a review of outstanding receivables and economic conditions. For the years ending December 31, 2023 and 2022, there was no allowance for credit losses recorded; however, in 2023, Crave Cookies recorded a credit loss expense of $5,000 related to doubtful accounts receivable.
These notes are crucial for a comprehensive understanding of Crave Cookies's financial health, as they provide transparency into the accounting methods, potential risks, and significant estimates that influence the reported financial data. Prospective franchisees should carefully review these notes along with the rest of the financial statements to make informed decisions.