What are Americas Best Value Inn's criteria for classifying investments as cash equivalents?

According to Americas Best Value Inn's 2025 Franchise Disclosure Document, the company considers "highly liquid investments" with an original maturity of three months or less to be cash equivalents. This means that any investment that can be quickly converted into cash and was purchased with the expectation of being held for no more than three months is classified as a cash equivalent for accounting purposes.

This classification is important for understanding Americas Best Value Inn's financial statements, as cash equivalents are included in the total cash balance reported. This provides a more comprehensive view of the company's liquid assets, which are readily available to meet short-term obligations.

The FDD also notes that cash balances at banks and other financial institutions may, at times, exceed federal insurance limits. This is a common situation for many businesses, and it means that Americas Best Value Inn may have cash holdings that are not fully insured by the government. Prospective franchisees should be aware of this and may want to inquire about the company's policies for managing and protecting its cash balances.