What are franchise notes receivable for Fast Fix Jewelry And Watch Repairs?
Fast_Fix_Jewelry_And_Watch_Repairs Franchise · 2025 FDDAnswer from 2025 FDD Document
There was no change in the allowance for credit losses during the year ended December 31, 2024.
Notes to Consolidated Financial Statements For the years ended December 31, 2024 and 2023
Note 1. Summary of Significant Accounting Policies and Activities, Continued
Franchise notes and advances receivable:
Franchise notes consist of amounts due to the Company from the purchase or renewal of individual franchises (three and seven franchisees at December 31, 2024 and 2023, respectively). Late fees may be charged when the outstanding balance due is owed for more than 30 days. Advances receivable are loans to existing or former franchisees. Advances receivable bear interest at rates up to 8 percent and are generally paid over terms varying from one to six years.
Management regularly reviews amounts outstanding and past due to determine if additional collection actions are necessary, which may include legal collection proceedings. Once a receivable is turned over to legal counsel for collection, interest may be accrued on the outstanding balance at a rate not to exceed what is provided for under Florida law, and delinquent notes and advances receivable may accrue interest on the outstanding balance at a rate provided for in the underlying promissory note and franchise agreements. There were no delinquent franchise notes and advances receivable outstanding in excess of 90 days as of December 31, 2024 and 2023.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 37)
What This Means (2025 FDD)
According to Fast Fix Jewelry And Watch Repairs's 2025 Franchise Disclosure Document, franchise notes consist of the amounts due to Fast Fix Jewelry And Watch Repairs for the purchase or renewal of individual franchises. As of December 31, 2024, there were three franchisees with such notes, and as of December 31, 2023, there were seven franchisees with such notes. Late fees may be charged if the outstanding balance is owed for more than 30 days. Advances receivable are loans to existing or former franchisees, bearing interest rates up to 8 percent, generally paid over one to six years.
Management regularly reviews outstanding and past due amounts to determine if additional collection actions are necessary, including legal proceedings. Once a receivable is turned over to legal counsel for collection, interest may accrue on the outstanding balance at a rate not exceeding what is provided for under Florida law. Delinquent notes and advances receivable may accrue interest on the outstanding balance at a rate provided for in the underlying promissory note and franchise agreements. As of December 31, 2024 and 2023, there were no delinquent franchise notes and advances receivable outstanding for more than 90 days.
For a prospective Fast Fix Jewelry And Watch Repairs franchisee, this indicates that the company does offer financing options for franchise purchases or renewals. However, it's crucial to understand the terms of these notes, including interest rates, repayment schedules, and potential late fees. The FDD also highlights the company's active management of these receivables, including potential legal action for collection, which underscores the importance of franchisees meeting their financial obligations. The fact that no notes were delinquent more than 90 days at the end of 2023 and 2024 suggests effective management of these receivables.