What was the 'Allowance for doubtful accounts' for Del Taco as of September 29, 2024?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
Company are included in "Selling, general and administrative expenses" in the accompanying condensed consolidated statements of earnings. In 2025 and 2024, consolidated advertising costs were $10.5 million and $10.4 million, respectively.
Allowance for credit losses — The Company closely monitors the financial condition of our franchisees and estimates the allowance for credit losses based on the lifetime expected loss on receivables. These estimates are based on historical collection experience with our franchisees as well as other factors, including current market conditions and events. Credit quality is monitored through the timing of payments compared to predefined aging criteria and known facts regarding the financial condition of the franchisee or customer. Account balances are charged off against the allowance after recovery efforts have ceased. The Company's allowance for doubtful accounts has not historically been material.
The following table summarizes the activity in the allowance for do
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 58)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, the company monitors the financial condition of its franchisees to estimate the allowance for credit losses, basing these estimates on historical collection experience, market conditions, and other relevant factors. The allowance for doubtful accounts is not historically material for Del Taco.
The activity in the allowance for doubtful accounts is summarized in a table. The balance at the beginning of the period was $(4,512,000), with a provision reversal for expected credit losses of $(421,000) and write-offs charged against the allowance of $140,000.
Therefore, the balance as of the end of the period, which is September 29, 2024, was $(4,793,000). This figure represents the company's estimate of potential uncollectible accounts from its franchisees.