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4. Other Assets
3 Months Ended
Mar. 31, 2019
Other Assets [Abstract]  
4. Other Assets

Other assets as of March 31, 2019, include security deposits of $13,600, cash surrender value of life insurance in the amount of $199,000, long-term franchisee receivables in the amount of $3.7 million which is net after a $4.0 million valuation allowance.

 

Long-term receivable from franchisees represent receivables from approximately 80 different non-traditional franchisees (Noble Roman’s franchises located within a host facility). These receivables originated from a variety of circumstances, including where audits of a number of the non-traditional franchises’ reporting of sales found them to be underreporting their sales and, therefore, underpaying their royalty obligations. In other instances, some franchisees were selling non-Noble Roman’s products under the Noble Roman’s trademark. In addition, some receivables arose from the Company incurring legal fees to enforce the franchise agreements and other collection costs totaling approximately $2.4 million which adds to the receivables in accordance with the agreements and some of the receivables were generated by early termination of the franchise agreements. These receivables have been classified as long-term since collections are expected to extend over more than a one-year cycle.