Note 15 - Notes Receivable |
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Mar. 31, 2025 | |||||||||||||||||||||||||||||||||||||
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| Loans, Notes, Trade and Other Receivables Disclosure [Text Block] |
Note 15 - Notes Receivable
Several franchisees borrowed funds from us primarily to finance the initial purchase price of office assets, including intangible assets.
Notes outstanding, net of allowance for losses, were approximately $7.5 million and $7.8 million as of March 31, 2025 and December 31, 2024, respectively. Notes receivable generally bear interest at a fixed rate between 6.0% and 10.0%. Notes receivable are generally secured by the assets of each office and the ownership interests in the franchise. We report interest income on notes receivable as interest income in our Consolidated Statements of Operations. Interest income was approximately $134 thousand and $136 thousand during the three months ended March 31, 2025 and March 31, 2024, respectively.
We estimate the allowance for credit losses for franchisees separately from the allowance for credit losses from non-franchisees because of the level of detailed sales information available to us with respect to our franchisees. Based on our review of available collateral historical information, current conditions, and reasonable and supportable forecasts, we have established an allowance of approximately $876 thousand and $773 thousand as of March 31, 2025 and December 31, 2024, respectively, for credit losses.
The following table summarizes our notes receivable balance to franchisees:
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