What was the bad debt expense for Ledgers in 2023?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
n off in 2023. During the year ended December 31, 2024, the Company identified this error and restated its financial statements to properly recognize the termination of the franchise agreement recording $219,118 in bad debt expense for the year ended December 31, 2023 and removing the $752,118 note receivable, and $533,000 deferred revenue balances at December 31, 2023.
LOYALTY BUSINESS SERVICES, LLC (FORMERLY FIDE HOLDING, LLC) Notes to Financial Statement
NOTE 9 - PRIOR PERIOD ADJUSTMENT (Continued)
The effect of these restatement is to decrease members' equity as of January 1 as follows:
| Previously | As | |
|---|---|---|
| 2023 Restatement | Reported | Restated |
| Members' equity - January 1, 2024 | $1,374,619 | $1,155,501 |
| Notes Receivable | 792,878 | 40,760 |
| Deferred Revenue | 680,989 | 147,989 |
| Bad Debt Expense | 75,206 | 294,324 |
| Net loss | (287,482) | (506,600) |
NOTE 10 - GOING CONCERN CONSIDERATIONS
As of December 31, 2024, the Company had negative working capital of $468,670. For the year ended December 31, 2024, the Company had operating losses of $490,281 and negative operating cash flows of $471,328.
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to Ledgers' 2025 Franchise Disclosure Document, the company's financial statements for 2023 were restated due to an error regarding a terminated franchise agreement. The restatement involved recording $219,118 in bad debt expense related to this terminated agreement. However, the table of operations also shows a bad debt expense of $294,324 for 2023.
This discrepancy arises from the prior period adjustment. The initial error involved not properly writing off a note receivable and deferred revenue for a franchise agreement that was terminated in 2023. The restatement corrected this by including the $219,118 bad debt expense. The table reflects the total bad debt expense, including the adjustment.
For a prospective Ledgers franchisee, this highlights the importance of accurate financial record-keeping and the potential impact of errors on financial statements. It also demonstrates Ledgers' commitment to correcting errors and providing transparent financial information. Franchisees should ensure they have robust accounting practices in place to avoid similar issues.
Therefore, the total bad debt expense for Ledgers in 2023, after the restatement, was $294,324. This figure includes the $219,118 adjustment related to the terminated franchise agreement and other bad debt expenses incurred during the year.