What was the accounts receivable balance for Face Foundrie as of December 31, 2024?
Face_Foundrie Franchise · 2025 FDDAnswer from 2025 FDD Document
mber 31, 2023, $1,458,965 has been set aside by the Company for satisfaction of the gift card liability. As of December 31, 2022, $700,015 was set aside by the Company for satisfaction of the gift card liability.
NOTES TO THE FINANCIAL STATEMENTS December 31, 2024, 2023 and 2022
(f) Accounts Receivable
Accounts receivable are recorded for amounts due based on the terms of executed franchise agreements for franchise sales, royalties and other sales transactions. These accounts receivable are carried at original invoice amount less an estimate made for doubtful receivables based on a review of outstanding amounts.
When determining the allowance for doubtful receivable, the Company has adopted ASC 326, Financial Instruments—Credit Losses. This standard requires that management utilize the Current Expected Credit Losses ("CECL") model to recognize the appropriate allowance for doubtful receivables. This model requires entities to estimate and recognize expected credit losses over the life of the financial instrument. For trade receivables, management has elected to apply a simplified approach, based on historical loss experience and adjustments for current and forecasted economic conditions. Management regularly evaluates individual customer receivables, considering their financial condition, credit history and current economic conditions. Accounts receivable are written off when deemed uncollectible. Recoveries of accounts receivable previously written off are recorded as
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 73)
What This Means (2025 FDD)
According to Face Foundrie's 2025 Franchise Disclosure Document, the accounts receivable balance as of December 31, 2024, was $424,770. This figure represents the total amount due to Face Foundrie based on executed franchise agreements for franchise sales, royalties, and other sales transactions. These receivables are recorded at the original invoice amount, minus any estimated allowance for doubtful receivables.
Face Foundrie uses the Current Expected Credit Losses (CECL) model, as dictated by ASC 326, to estimate and recognize allowances for doubtful receivables. This model requires estimating expected credit losses over the life of the financial instrument. For trade receivables, Face Foundrie uses a simplified approach based on historical loss experience and adjustments for current and forecasted economic conditions. As of December 31, 2024, Face Foundrie had an allowance for doubtful accounts of $25,000. There was no allowance for doubtful accounts as of December 31, 2023 and 2022.
For a prospective franchisee, accounts receivable are amounts owed to Face Foundrie, primarily by franchisees. Monitoring the accounts receivable and the allowance for doubtful accounts is part of Face Foundrie's financial management. The allowance for doubtful accounts reflects Face Foundrie's estimate of the portion of receivables that may not be collectible. This indicates that Face Foundrie is actively managing and accounting for potential credit losses from its franchisees.