What does the inventory of Crave Cookies consist of?
Crave_Cookies Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 47)
What This Means (2025 FDD)
According to the 2025 Crave Cookies FDD, the company's inventory consists of cookie boxes. These inventories are valued at the lower of their cost or net realizable value. The cost of these cookie boxes is determined using the first-in, first-out (FIFO) method.
For a prospective Crave Cookies franchisee, this means that the primary inventory they will manage is the packaging for the cookies they sell. The FIFO method implies that the boxes acquired first are assumed to be used first, which can impact how the cost of goods sold is calculated and reported for accounting purposes. This valuation method is a standard accounting practice.
Understanding the inventory management and valuation is crucial for franchisees to accurately track their expenses and profitability. While the FDD specifies that inventory consists of cookie boxes, franchisees should seek clarification from Crave Cookies regarding any other items that might be considered part of their inventory, such as ingredients or branded merchandise, to ensure comprehensive inventory management.