How does Crave Cookies measure revenue?
Crave_Cookies Franchise · 2025 FDDAnswer from 2025 FDD Document
y 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.
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 year ended December 31, 2024, there was no credit loss expense related to doubtful accounts receivable, where collectability was not reasonably assured.
Inventory - inventory 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.
Related party note receivable - related party notes receivable represents 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.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 47)
What This Means (2025 FDD)
According to the 2025 Crave Cookies FDD, the company states accounts receivable at the amount of consideration from customers of which the Company has an unconditional right to receive. Crave Cookies 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. This means that Crave Cookies recognizes revenue when it has an unconditional right to receive payment from its customers.
Crave Cookies 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. As of December 31, 2024 the Company did not have cash balances over the federally insured limit.
For a prospective franchisee, this accounting policy indicates that Crave Cookies aims to accurately reflect its financial position by carefully assessing and accounting for potential credit losses. The absence of an allowance for credit losses as of December 31, 2024, suggests that the company considers its receivables to be fully collectible at that time. However, franchisees should be aware that this assessment is subject to change based on future economic conditions and the creditworthiness of customers.