According to Ledgers's 2025 Franchise Disclosure Document, the notes receivable, less current portion, for the year 2022 was $634,000. This figure represents the amount of notes receivable that Ledgers expected to receive beyond the upcoming year.

Notes receivable typically arise from financing arrangements Ledgers has with its franchisees, such as for area representative and unit franchise agreements. These promissory notes may bear interest up to 12%, as detailed in Note 4. The current portion of notes receivable, which represents amounts due within the next year, is classified as a current asset, while the remaining balance is classified as a non-current asset.

For a prospective franchisee, understanding the notes receivable is important because it reflects Ledgers's financial health and its reliance on franchisee financing. A high amount of notes receivable could indicate that Ledgers is actively involved in financing its franchisees, which may be a positive sign of support. However, it also carries the risk of potential credit losses if franchisees are unable to meet their obligations. Therefore, it's crucial to assess the quality and collectibility of these notes receivable as part of due diligence.