What is the FDIC insurance limit mentioned in Aw's financial statements?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
r this arrangement, franchisees are granted the right to operate a Papa Ray's Restaurant for a specified number of years.
Concentration of Credit Risk-Financial instruments that potentially expose the Company to concentration of credit risk primarily consist of cash and cash equivalents. The balances in the Company's cash accounts did not exceed the Federal Deposit Insurance Company's (FDIC
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 39)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, the financial statements include a note regarding the concentration of credit risk related to cash and cash equivalents. The note states that Aw's balances in its cash accounts did not exceed the Federal Deposit Insurance Company's (FDIC) insurance limit of $250,000. This means that Aw keeps its cash balances below the amount insured by the FDIC.
For a prospective Aw franchisee, this information indicates that Aw is aware of and manages its cash balances to stay within FDIC insurance limits. This is a common and prudent practice for businesses to protect their cash holdings in the event of a bank failure. The FDIC insurance limit of $250,000 means that if Aw has cash accounts at accredited financial institutions, up to $250,000 per depositor, per insured bank is protected by the FDIC.
This information does not directly impact the franchisee's operations, but it provides insight into Aw's financial management practices at the corporate level. Franchisees typically manage their own cash and should also be aware of FDIC insurance limits for their own business accounts. It is a good business practice to ensure that cash holdings remain within FDIC coverage limits to minimize risk.