What was the value of Crave Cookies' contract assets at the beginning of 2022?
Crave_Cookies Franchise · 2025 FDDAnswer from 2025 FDD Document
ut the Company's contract assets and liabilities from contracts with customers as of December 31, 2023 and 2022:
| 2023 | 2022 | |
|---|---|---|
| Accounts receivable, beginning of year | $ 17,607 | $ - |
| Accounts receivable, end of year | $ 99,999 | $ 17,607 |
| Contract assets, beginning of year | $ 2 | $ 44,595 |
| Contract assets, end of year | $ | $ |
| Contract liabili |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 47)
What This Means (2025 FDD)
According to Crave Cookies' 2025 Franchise Disclosure Document, the contract assets at the beginning of 2022 were valued at $44,595. This figure represents the value of Crave Cookies' rights to receive consideration for goods or services that have been transferred to customers but for which payment is not yet due.
Contract assets typically arise when Crave Cookies performs its obligations under a contract before receiving payment. This can occur in various situations, such as when the company provides initial training or support to franchisees before the franchise location opens and begins generating revenue. The value of these assets is based on the estimated amount that Crave Cookies expects to collect from franchisees in the future.
For a prospective Crave Cookies franchisee, understanding the franchisor's contract assets can provide insights into the company's revenue recognition practices and its financial performance. It's important to note that contract assets are subject to potential credit risk, as there is no guarantee that the company will ultimately collect the full amount. However, the FDD indicates that Crave Cookies had $44,595 in contract assets at the beginning of 2022, which decreased to $2 at the beginning of 2023, suggesting effective management of these assets.