How often does Jersey Mikes evaluate its receivables to establish an allowance for credit losses?
Jersey_Mikes Franchise · 2025 FDDAnswer from 2025 FDD Document
Financial Instruments—The Company's financial instruments consist primarily of cash and cash equivalents (including restricted cash), accounts receivable, notes receivable, notes payable, accounts payable, and accrued expenses. These are recorded at cost, which approximates fair value. Refer below for considerations of long-term debt.
Source: Item 22 — CONTRACTS (FDD page 77)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, the provided excerpts do not contain information regarding the specific frequency with which Jersey Mike's evaluates its receivables to establish an allowance for credit losses. The excerpts do mention accounts receivable as part of the company's financial instruments. The FDD also details the company's approach to fair value measurements of its financial instruments. However, the exact process and timing of evaluating receivables for credit losses are not specified.
As the Franchise Disclosure Document does not specify the frequency that Jersey Mike's evaluates its receivables, prospective franchisees should directly ask the franchisor for details on their procedures for assessing and accounting for potential credit losses on receivables. Understanding these practices can help a franchisee better assess the financial management and reporting practices of the franchisor.
Understanding the frequency and methodology Jersey Mike's uses to evaluate receivables for credit losses can provide insight into the company's financial risk management and the potential impact on its financial statements. This information is essential for franchisees to make informed decisions about the financial stability and practices of the franchise system.