What was the reversal (provision) for expected credit losses, net, for Del Taco in 2023?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
ompany's allowance for doubtful accounts has not historically been material. The following table summarizes the activity in our allowance for doubtful accounts (in thousands):
| 2024 | 2023 | |
|---|---|---|
| Balance as of beginning of period | $ (4,146) | $ (5,975) |
| Rev |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 58)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, the reversal for expected credit losses, net, in 2023 was $1,788,000. This figure reflects an adjustment made to the allowance for doubtful accounts, which is an estimate of potential losses from franchisees who may not be able to pay what they owe to Del Taco.
A reversal of $1,788,000 suggests that Del Taco reduced its allowance for credit losses during 2023. This could be due to improved financial stability among franchisees, better collection efforts, or changes in the company's risk assessment models.
For a prospective franchisee, this information indicates how Del Taco manages financial risk associated with its franchisees. While a reversal is generally positive, it's important to understand the underlying reasons for the adjustment. Franchisees may want to inquire about the criteria Del Taco uses to assess credit risk and the historical trends in franchisee financial performance.