How does Face Foundrie assess the carrying amounts of its other current assets?
Face_Foundrie Franchise · 2025 FDDAnswer from 2025 FDD Document
2023, the balance was $750,000, which the Company converted into a note receivable. The terms of the note call for quarterly payments over five years beginning March 1, 2024. The note accrues interest at a rate of 1.99% annually. As of December 31, 2024, the balance was $750,000.
(i) Other Current Assets
The Company has other current assets of $29,383 and $73,451 as of December 31, 2023 and 2022, respectively. There were not any other current assets as of December 31, 2024. These items consist of accrued royalty, advertising, and technology fee reve
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 73)
What This Means (2025 FDD)
According to Face Foundrie's 2025 Franchise Disclosure Document, the company regularly assesses the carrying amounts of its other current assets to ensure they are not overstated and are recoverable in the normal course of business. These assets consist of accrued royalty, advertising, and technology fee revenue, as well as gift card revenue.
This assessment process is crucial for maintaining accurate financial records. If Face Foundrie determines that the carrying amount of an asset is overstated or not recoverable, any impairments or adjustments are recognized in the period they are identified. This means that the company will write down the value of the asset to reflect its true worth, which can impact the company's profitability in that period.
For a prospective Face Foundrie franchisee, this indicates that the franchisor is diligent in managing its assets and follows sound accounting practices. It also suggests that the franchisee's royalty, advertising, and technology fee payments, which contribute to these current assets, are carefully monitored and accounted for. Understanding this process can give franchisees confidence in the financial stability and transparency of Face Foundrie.