Question 172 ptcIn the context of franchises, the term accounts receivable refers to money owed to…

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➤ Why do accounts receivable matter for a franchisor’s cash flow?
Accounts receivable affect a franchisor’s liquidity because they represent future cash inflows tied to sales and fees. High receivables can strain cash flow if collections lag. Monitoring aging, enforcing credit terms, and managing reserves for doubtful accounts help maintain predictable cash and support working capital planning and franchise operations.

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