According to Focus Cfo, what offsets the accounts receivable?

According to Focus Cfo's 2025 Franchise Disclosure Document, the accounts receivable, which consist of invoices to clients receiving CFO services, are offset by the accrued compensation payable to the franchisees and licensees for services provided to the clients. Focus Cfo continually monitors these balances and reports a strong history of collections. The company does not pay franchisees and licensees until payment is received from clients.

Focus Cfo believes that the accounts receivable as of December 31, 2024, and 2023, are fully collectible, and any estimate for loss is immaterial to the consolidated financial statements. When a receivable is deemed uncollectible, Focus Cfo uses the direct write-off method.

This means that Focus Cfo franchisees and licensees will not be paid for their services until Focus Cfo receives payment from the clients they serve. This policy reduces the risk of bad debt for Focus Cfo, as the compensation payable to franchisees and licensees effectively acts as a buffer against uncollectible accounts. For a prospective franchisee, this highlights the importance of Focus Cfo's client collection practices, as their income is directly tied to the company's ability to collect payments from clients.