What was the provision for credit losses on accounts receivable for Crave Cookies in 2023?
Crave_Cookies Franchise · 2025 FDDAnswer from 2025 FDD Document
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 credit losses, which is based upon a review of outstanding receivables, historical collection information and existing economic conditions. As of December 31, 2023 and 2022, 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 years ended December 31, 2023 and 2022, credit loss expense related
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 47)
What This Means (2025 FDD)
According to Crave Cookies' 2025 Franchise Disclosure Document, the company addresses accounts receivable and potential credit losses. For the year ending December 31, 2023, Crave Cookies did not record an allowance for credit losses. However, the company did incur a credit loss expense of $5,000 related to doubtful accounts receivable where collectability was not reasonably assured.
This means that while Crave Cookies did not anticipate any overall credit losses on its accounts receivable, it did experience $5,000 in losses from accounts deemed uncollectible during 2023. This suggests that Crave Cookies may have encountered some difficulties in collecting payments from certain customers or franchisees during that year.
For a prospective franchisee, this indicates that there is a risk of incurring credit losses, even if the company generally expects to collect its receivables. It would be prudent to inquire about Crave Cookies' credit policies, the typical credit terms extended to customers or franchisees, and the procedures for managing and collecting overdue accounts. Understanding these aspects can help a franchisee better assess and manage their own financial risks.