Does Anago have credit risk related to its cash and equivalents accounts?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
s of $400,000 with an estimated cost of the territory of $98,000 for a gain on sale of the territory assets of EHLB, Inc. dba Anago of Las Vegas of $302,000 which has been recorded as other income on the consolidated statement of operations. As EHLB, Inc. dba Anago of Las Vegas operations will not continue in future periods the revenue and expenses of the entity have been reclassed and reported with "other income and expenses". Net income (loss) for EHLB, Inc. dba Anago of Las Vegas for the years ended December 31, 2024 and 2023 totaling ($34,405) and $317,735, respectively, have been reclassed to other income (expenses) for compari
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, Anago acknowledges potential credit risk related to its cash and equivalents accounts. While these accounts are held in high credit-quality financial institutions, the funds may exceed the coverage provided by the Federal Deposit Insurance Corporation (FDIC), which insures up to $250,000 for most depository accounts. As of December 31, 2024, 2023, and 2022, Anago had funds exceeding the FDIC limit by $1,370,883, $1,381,558, and $660,503, respectively.
Additionally, Anago maintains funds in an investment brokerage account that is not insured through the FDIC. As of December 31, 2024, 2023, and 2022, the amounts held in this investment brokerage account were $329,552, $54,207, and $191,769, respectively. This lack of FDIC insurance means these funds are subject to additional risk.
For a prospective franchisee, this indicates that Anago's financial stability could be vulnerable to the solvency of the financial institutions where it holds its cash and equivalents. While Anago uses high credit-quality institutions, exceeding FDIC limits means that a portion of their cash holdings is not government-insured. This is a risk factor to consider when evaluating the financial health of the franchisor.