What was Gold Star's Credit Loss Expense in 2024?

According to Gold Star's 2025 Franchise Disclosure Document, the Accounts Receivable line item includes a deduction for "Less Allowance for Expected Credit Losses of $896,732" as of 2024. This figure represents Gold Star's estimate of the amount of accounts receivable that may not be collectible.

In simpler terms, this means that Gold Star anticipates that $896,732 of its outstanding invoices might not be paid by customers. This allowance reduces the stated value of accounts receivable on the balance sheet to reflect a more realistic expectation of what the company will actually collect. The allowance is a contra-asset account, meaning it reduces the value of an asset (accounts receivable).

For a prospective franchisee, this indicates the level of risk Gold Star faces regarding uncollectible accounts. While this figure pertains to the overall company, it provides insight into the creditworthiness and payment behavior of Gold Star's customer base. Franchisees should inquire about Gold Star's credit policies and procedures for managing accounts receivable to understand how they can minimize their own potential credit losses.

It's important to note that this is an estimated figure, and the actual amount of credit losses may differ. However, it provides a reasonable benchmark for assessing the potential impact of uncollectible accounts on Gold Star's financial performance. Franchisees should also investigate whether they will bear any responsibility for a portion of these credit losses.