How does Gold Star determine the past due status on accounts receivable?

According to Gold Star's 2025 Franchise Disclosure Document, the determination of when an account receivable is considered past due is based on the terms specified in customer contracts and invoices. This means that Gold Star establishes payment terms with its customers, and if a customer fails to make a payment within the agreed-upon timeframe, the account is then classified as past due.

For a prospective franchisee, this indicates the importance of adhering to the standard contract and invoice terms set by Gold Star to ensure consistent management of accounts receivable. It also highlights the need to carefully review customer contracts and invoices to understand the specific payment terms that apply to each account. This will help in accurately tracking and managing past due accounts.

Furthermore, the FDD states that Gold Star does not charge interest on past due receivables. Accounts are written off against the allowance when deemed uncollectible by management, and any recoveries of previously written-off accounts are recorded when received. This policy provides clarity on how Gold Star handles uncollectible accounts and the process for managing them.