Did Pearce Bespoke have an allowance for doubtful accounts as of December 31, 2024?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
The timing of revenue recognition may be different from the timing of invoicing to customers. The Company records an accounts receivable when revenue is recognized prior to invoicing, or unearned revenue when revenue is recognized after invoicing. Management evaluates individual customers' receivables considering their financial condition, credit history and current economic conditions. Accounts receivable are written off if deemed uncollectible and recoveries of accounts receivable previously written off are recorded as income when received. The Company did not have any allowance for doubtful accounts as of December 31, 2024, and did not write off any accounts receivable during the year ended December 31, 2024.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 39)
What This Means (2025 FDD)
According to Pearce Bespoke's 2025 Franchise Disclosure Document, the company did not have an allowance for doubtful accounts as of December 31, 2024. The FDD states that management evaluates individual customers' receivables considering their financial condition, credit history, and current economic conditions. Accounts receivable are written off if deemed uncollectible, and recoveries of accounts receivable previously written off are recorded as income when received.
Pearce Bespoke records accounts receivable when revenue is recognized prior to invoicing, or unearned revenue when revenue is recognized after invoicing. Because Pearce Bespoke had no allowance for doubtful accounts as of December 31, 2024, this indicates that the company considered all accounts receivable to be fully collectible at that time. Additionally, Pearce Bespoke did not write off any accounts receivable during the year ended December 31, 2024.
For a prospective franchisee, this suggests that Pearce Bespoke has been effective in managing its accounts receivable and minimizing credit losses. However, it is important to note that this is a snapshot in time, and future economic conditions or changes in franchisees' financial health could impact the collectability of accounts receivable. A prospective franchisee may want to inquire about Pearce Bespoke's historical experience with bad debts and its policies for managing credit risk.