Under what condition does Pearce Bespoke write off accounts receivable?
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 records accounts receivable when revenue is recognized before invoicing. Management evaluates the receivables based on the customer's financial condition, credit history, and current economic conditions. Accounts receivable are written off by Pearce Bespoke if they are deemed uncollectible.
For a prospective franchisee, this means that Pearce Bespoke assesses the creditworthiness of its franchisees and customers, and if an account is considered uncollectible, Pearce Bespoke will write it off. This is a standard accounting practice to accurately reflect the financial status of the company.
Additionally, the FDD states that recoveries of accounts receivable previously written off are recorded as income when received. This indicates that if Pearce Bespoke manages to recover funds from an account that was previously written off as uncollectible, the recovered amount will be recorded as income. As of December 31, 2024, Pearce Bespoke did not have any allowance for doubtful accounts and did not write off any accounts receivable during the year.