XML 20 R9.htm IDEA: XBRL DOCUMENT v3.21.1
2. Accounts Receivable
12 Months Ended
Dec. 31, 2020
Accounts and Financing Receivable, after Allowance for Credit Loss [Abstract]  
Accounts Receivable

At December 31, 2019 and 2020, the carrying value of the Company’s accounts receivable has been reduced to anticipated realizable value. As a result of this reduction of carrying value, the Company anticipates that substantially all of its net receivables reflected on the Consolidated Balance Sheets as of December 31, 2019 and 2020 will be collected.

 

Other assets, as of December 31, 2020, includes security deposit and cash value of life insurance.

 

Long-term receivables from franchisees in the past represented 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 Noble Roman’s trademark. In addition, some receivables arose from the Company incurring legal fees to enforce the franchise agreements and other collection cost which adds to the receivables in accordance with the agreements. Some of the receivables were generated by early termination of the franchise agreements. In 2020, in light of the additional uncertainty created as a result of the COVID-19 pandemic, the Company decided to create a reserve for uncollectability on all long-term franchisee receivables. The Company will continue to pursue collection where circumstances are appropriate and all collections of these receivables in the future will result in additional income at the time received.