What was the total amount of notes receivable (principal) for Ledgers in 2022?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
E 3 - FRANCHISE AGREEMENTS**
Franchise locations consisted of the following as of December 31, 2024:
| Units | ARA Units | |
|---|---|---|
| Units/ARA Units beginning of year | 2 | 1 |
| Units purchased/obtained | *** | 7 2 2 |
| New units opened | 1 | 8 |
| Units Sold | I.E. | |
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to Ledgers's 2025 Franchise Disclosure Document, the total amount of notes receivable (principal) in 2022 was $853,748. This figure represents the amount of money owed to Ledgers from financed area representative and unit franchise agreements. These promissory notes bear interest up to 12%.
Notes receivable are considered assets on Ledgers's balance sheet, reflecting the total outstanding balance of these loans. For a prospective franchisee, understanding the nature and terms of these notes is important. These notes receivable are related to financing provided to area representatives and franchisees, and the interest rates can reach up to 12%.
It is important to note that the FDD also mentions an allowance for credit losses related to these notes receivable. This allowance accounts for the possibility that some of these notes may not be fully repaid. Reviewing the historical performance of these notes and the adequacy of the allowance for credit losses can provide insights into the risk associated with these assets.
Overall, the notes receivable represent a significant asset for Ledgers, but it's crucial for potential franchisees to understand the details of these financing arrangements, including interest rates, repayment terms, and the allowance for credit losses, to assess the financial health and stability of the franchise system.