Did Crave Cookies record any bad debt expense in 2022?
Crave_Cookies Franchise · 2025 FDDAnswer from 2025 FDD Document
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 doubtful accounts, which is based upon a review of outstanding receivables, historical collection information and existing economic conditions. As of December 31, 2022 and 2021, there was no allowance for doubtful accounts 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. No bad debt expense was recorded in 2022 or 2021.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 47)
What This Means (2025 FDD)
According to Crave Cookies's 2025 Franchise Disclosure Document, the company did not record any bad debt expense in 2022. The FDD states that no bad debt expense was recorded in either 2022 or 2021. This indicates that Crave Cookies did not experience any uncollectible accounts receivable that required them to write off any debt as an expense during that year.
For a prospective franchisee, this information suggests that Crave Cookies has been effective in managing its accounts receivable and minimizing credit losses. This could be due to a variety of factors, such as careful screening of customers, effective collection procedures, or favorable economic conditions. However, in 2023, Crave Cookies recorded $5,000 in credit loss expense related to doubtful accounts receivable.
It's important to note that the absence of bad debt expense in one year does not guarantee it will remain absent in future years. Economic conditions and changes in customer behavior can impact the collectability of accounts receivable. Franchisees should inquire about Crave Cookies's policies and procedures for managing credit risk and minimizing bad debt expense to understand how they can protect their own financial interests.
While the FDD provides historical financial information, it's essential for prospective franchisees to conduct their own due diligence and consult with financial advisors to assess the potential risks and rewards of investing in a Crave Cookies franchise. Understanding the company's financial performance and risk management practices is crucial for making an informed investment decision.