How does Monicals Pizza account for uncollectible accounts receivable?
Monicals_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
ACCOUNTS RECEIVABLE:
The majority of accounts receivable is comprised of credit card receivables. The Company uses the allowance method to account for uncollectible accounts receivable. The Company estimates an allowance based on historical collection experience and a review of the current status of trade accounts receivable. As of December 31, 2023 and 2022, no allowance was provided as all receivables were considered collectible. Interest is only charged to franc
Source: Item 23 — RECEIPTS (FDD pages 46–257)
What This Means (2025 FDD)
According to Monicals Pizza's 2025 Franchise Disclosure Document, the company uses the allowance method to account for uncollectible accounts receivable. The majority of their accounts receivable is comprised of credit card receivables.
Monicals Pizza estimates an allowance based on historical collection experience and a review of the current status of trade accounts receivable. This means they look at past payment patterns and the current financial health of their customers to predict how much money they might not be able to collect.
As of December 31, 2023 and 2022, Monicals Pizza did not provide any allowance because all receivables were considered collectible. This indicates that, based on their assessment, they expected to collect all outstanding payments during those years. It's important to note that interest is only charged to franchisees, which may influence the collectibility of those particular accounts.