What was the allowance for unredeemed Monicals Pizza gift cards as of December 31, 2024?
Monicals_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
ards (including lost gift cards, etc.) are presented as a liability on the consolidated balance sheets. The allowance for unredeemed gift cards was $277,226 and $242,093 as of December 31, 2024 and 2023, respectively. The liability is reduced by an annual estimated amount of breakage calculated as 6% of total activations over the past five years which was $35,133 and $33,216 for the years ended December 31, 2024 and 2023, respectively.
DEFERRED VENDOR ALLOWANCE:
Initial contract sign-on advan
Source: Item 23 — RECEIPTS (FDD pages 46–257)
What This Means (2025 FDD)
According to Monicals Pizza's 2025 Franchise Disclosure Document, the allowance for unredeemed gift cards as of December 31, 2024, was $277,226. This figure represents the amount set aside to cover the liability associated with gift cards that have been sold but not yet redeemed by customers. These unredeemed gift cards are considered a liability on Monicals Pizza's consolidated balance sheets.
Monicals Pizza reduces this liability by an estimated amount of breakage, which is calculated annually. For the year ending December 31, 2024, the breakage was calculated as 6% of total gift card activations over the past five years, amounting to $35,133. Breakage refers to the portion of gift cards that are not expected to be redeemed due to loss, expiration, or other reasons.
For a prospective franchisee, this information is relevant as it provides insight into how Monicals Pizza manages its gift card program and accounts for the associated liabilities. Understanding the allowance for unredeemed gift cards and the breakage calculation can help franchisees better interpret the company's financial statements and assess the potential impact of gift card sales on their own restaurant's financial performance.