Allowance For Credit Losses

12 Months Ended

Dec. 31, 2023

10. Allowance for Credit Losses

Estimates of expected credit losses, even if remote, are based upon historical account write-off trends, facts about the current financial condition of the debtor, forecasts of future operating results based upon current trends of select operating metrics, and macroeconomic factors. Credit quality is monitored through the timing of payments compared to the prescribed payment terms and known facts regarding the financial condition of the franchisee or customer. Account and note balances are charged off against the allowance after recovery efforts have ceased.

The following table summarizes changes in our allowances for credit losses for accounts receivable and notes receivable:


(In thousands)	Accounts Receivable		Notes Receivable
Balance at December 26, 2021	$	2,364	$	1,500
Current period provision for expected credit losses, net (a)	6,474		14,066
Write-offs charged against the allowance	(2,120)		(1,067)

Balance at December 25, 2022	$	6,718	$	14,499
Current period provision for expected credit losses, net (b)	3,609		1,784
Write-offs charged against the allowance	(1,974)		(191)

Balance at December 31, 2023	$	8,353	$	16,092

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(a) The Company recorded $14.6 million of one-time, non-cash reserves in the first quarter of 2022 for certain accounts receivable and notes receivable primarily associated with a master franchisee with operations principally in Russia. The Company recorded $3.7 million of one-time, non-cash reserves in the second half of 2022 for certain accounts receivable and notes receivable primarily associated with the termination of significant franchisees in the UK.

(b) During the fourth quarter of 2023, the Company recorded $1.7 million of reserves for certain accounts receivable and notes receivable associated with the termination of a specific franchisee in the UK and $0.9 million of reserves for certain accounts receivable related to the conflict in the Middle East.