Where can I find additional information related to Management Recruiters' impaired notes receivable?

According to Management Recruiters' 2024 Franchise Disclosure Document, additional information regarding their impaired notes receivable can be found in Note 13 – Notes Receivable. This note is part of the financial statements included in the FDD.

Notes receivable typically consist of amounts owed to Management Recruiters related to financing for franchised locations. These receivables are reported at the principal balance outstanding, minus any allowance for losses. Interest is charged at a fixed rate, with income calculated based on the outstanding principal balance. These notes are generally secured by the assets of the franchise location and the ownership interests in the franchise itself.

Management Recruiters monitors the financial health of their debtors and sets aside provisions for estimated losses when they believe a debtor may not be able to meet their payment obligations. The company evaluates potential impairment of notes receivable using methods such as discounted future cash flows, at least annually, or whenever circumstances suggest that the asset's carrying amount may not be recoverable. When a note receivable is considered impaired, Management Recruiters stops accruing interest and only recognizes interest income upon actual payment.