What was the net value of notes receivable after accounting for credit losses for Ledgers in 2023?

According to Ledgers' 2025 Franchise Disclosure Document, the net value of notes receivable after accounting for credit losses in 2023 was $40,760. This figure is derived from the notes receivable principal of $40,000 and accrued interest of $16,607, which totals $56,607. After subtracting the allowance for credit losses of $15,847, the resulting net value is $40,760.

This valuation is a key indicator of the financial health of Ledgers, as it reflects the actual amount of money the company expects to collect from its franchisees and area representatives. Notes receivable typically arise from financing agreements related to franchise fees, so understanding their net value helps potential franchisees assess the risk associated with these financial instruments.

The FDD also indicates that during 2023, Ledgers restated its financial statements due to errors in recognizing a terminated franchise agreement. This restatement involved writing off a $752,118 note receivable and recording $219,118 in bad debt expense. This prior period adjustment significantly impacted the reported figures for notes receivable and members' equity, highlighting the importance of carefully reviewing the restated financials to understand the true financial position of Ledgers.

Prospective franchisees should pay close attention to the notes receivable and the allowance for credit losses, as these figures can fluctuate and impact the company's overall financial stability. It is advisable to inquire about the criteria Ledgers uses to determine the allowance for credit losses and the historical trends in write-offs to gain a better understanding of the potential risks associated with these receivables.