What was the allowance for notes and accounts receivable for Dq Treat in 2023?
Dq_Treat Franchise · 2025 FDDAnswer from 2025 FDD Document
gregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with GAAS, we:
- Exercise professional judgment and maintain professional skepticism throughout the audit.
- Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
- Obtain an understanding of internal control relevant
Source: Item 17 — The following paragraph is added to the end of Item 17 of the Disclosure Document: (FDD pages 70–378)
What This Means (2025 FDD)
According to Dq Treat's 2025 Franchise Disclosure Document, the allowance for notes and accounts receivable was $903 in 2023. This allowance represents an estimated amount that Dq Treat does not expect to collect from its notes and accounts receivable. Notes and accounts receivable consist primarily of service fees, franchise sales fees, and advertising fees due principally from franchisees and gift card receivables.
The allowance for expected credit losses is a contra-asset account, meaning it reduces the total amount of the notes and accounts receivable reported on Dq Treat's balance sheet. This gives a more realistic view of what the company expects to actually receive. The allowance is recognized in an amount equal to anticipated future write-offs. Dq Treat estimates future writeoffs based on delinquencies, aging trends, industry risk trends, its historical experience and current trends.
For a prospective franchisee, this figure indicates the level of risk Dq Treat associates with collecting its receivables. A higher allowance could suggest a greater risk of non-payment from franchisees, while a lower allowance suggests a more stable payment history. It is important to note that this is just an estimate, and actual write-offs may differ. Franchisees should consider this information in conjunction with other financial data and market trends when evaluating the financial health of Dq Treat.