Does Alloy's cash ever exceed federally insured limits at its primary financial institution?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
NOTE 5. CONCENTRATIONS OF CREDIT RISK
Cash
Financial instruments that potentially expose the Company to concentration of credit risk consist primarily of cash. The Company's cash is placed with a major financial institution. At times, amounts held with this financial institution may exceed federallyinsured limits.
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, the company's financial instruments, primarily cash, may at times exceed federally insured limits at its primary financial institution. This presents a concentration of credit risk for Alloy. This risk is somewhat mitigated by the fact that Alloy places its cash with a major financial institution.
For a prospective franchisee, this means that Alloy's financial stability could be affected if the financial institution holding their cash experiences difficulties. While the presence of a major financial institution reduces this risk, it does not eliminate it entirely.
Franchisees should consider this information when evaluating the overall financial health and stability of Alloy. It is a common practice for companies to maintain relationships with well-established financial institutions to mitigate risks associated with cash management. However, it is important to understand that even major institutions are not immune to financial challenges.