What was the allowance for notes and accounts receivable for Dq Treat in 2024?
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 $1,501 in 2024. This figure represents an estimated reduction in the stated value of receivables due to potential credit losses from franchisees. The corresponding allowance in 2023 was $903.
This allowance is Dq Treat's management's best estimate of the amount of accounts receivable that may not be collected. It is based on factors such as delinquencies, aging trends, industry risk trends, historical experience, and current trends. The fact that Dq Treat has an allowance for doubtful accounts is standard accounting practice.
For a prospective franchisee, this indicates that Dq Treat recognizes the possibility of franchisees not paying all amounts owed. While not a direct cost to the franchisee, it reflects the financial health and risk management practices of Dq Treat. Understanding the factors that contribute to this allowance can provide insight into the financial stability of Dq Treat's franchise system.