What is included in the accounts and other receivables, net, for Del Taco?
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.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 58)
What This Means (2025 FDD)
Based on the 2025 FDD, the information provided does not specify the exact components of 'accounts and other receivables, net' for Del Taco. However, the FDD does provide some related information regarding receivables. Specifically, it mentions the allowance for credit losses, which is estimated based on the lifetime expected loss on receivables, taking into account historical collection experience, market conditions, and the financial health of franchisees. The company monitors credit quality by tracking payment timings against predefined criteria and any known financial issues of franchisees or customers. Account balances are charged off against the allowance after collection efforts have stopped.
Additionally, the FDD notes that in 2022, Jack in the Box acquired 13 franchise restaurants for total consideration of $0.3 million, which was comprised of franchise receivables owed to the Company as of the acquisition date. This indicates that franchise receivables can be a component of the company's assets. The document also mentions outstanding receivables from franchisees forgiven upon acquisition.
To fully understand what 'accounts and other receivables, net' includes, a prospective Del Taco franchisee should ask the franchisor for a detailed breakdown. This will help in assessing the financial health and operational practices related to receivables within the Del Taco franchise system.