Does Floors To Go require collateral or security for customer accounts receivable?
Floors_To_Go Franchise · 2025 FDDAnswer from 2025 FDD Document
he terms of the franchise agreement.
Brokerage fees from certain floor and window covering manufacturers utilized by the franchisees are recognized monthly based on the total amount of purchases made by the member franchisees and the terms of the contract. The performance obligation for the franchisees and manufacturers are considered to be met over the terms of the franchise agreement.
Notes to Financial Statements
Accounts Receivable
Accounts receivable are customer obligations due under normal trade terms generally requiring payment within 30 to 60 days from the invoice date. No collateral or other security is required to support accounts receivable, which are stated at the amount management expects to collect from outstanding balances. None of the Company's contracts have a significant financing component. Management estimates an allowance for expected credit losses based on the amount it expects to col
Source: Item 23 — RECEIPTS (FDD pages 47–204)
What This Means (2025 FDD)
According to the 2025 Floors To Go FDD, the company does not require collateral or other security to support accounts receivable. Customer obligations are typically due within 30 to 60 days from the invoice date under normal trade terms. These receivables are stated at the amount that Floors To Go management expects to collect from outstanding balances.
Floors To Go estimates an allowance for expected credit losses based on several factors. These factors include the length of time the receivables have been outstanding, historical collection experience, current market conditions, and forecasted economic and business environments. Amounts that are deemed uncollectible are written off against the allowance for credit losses.
For the years ending December 31, 2024 and 2023, the expenses associated with the allowance for credit losses were $52,720 and $35,724, respectively. These expenses are recognized in operating expenses. This indicates that while Floors To Go does not require collateral, they do account for potential losses from uncollectible accounts by setting aside an allowance.