What is the FDIC limit that the total amount on deposit with financial institutions might exceed for Bang Cookies?

According to Bang Cookies's 2024 Franchise Disclosure Document, the company maintains its cash balance in U.S. noninterest-bearing transaction accounts, which are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000. The document indicates that as of December 31, 2023, Bang Cookies's cash balance might have exceeded this FDIC insurance limit. This means that if Bang Cookies had more than $250,000 in its bank accounts on that date, the amount exceeding that limit would not have been protected by FDIC insurance.

For a prospective Bang Cookies franchisee, this information highlights the importance of understanding how the franchisor manages its cash and the potential risks associated with balances exceeding FDIC coverage. While the FDD doesn't specify the exact amount by which the cash balance exceeded the limit, it does indicate that such an event was possible. This is a common risk for businesses, especially those handling significant cash flow.

It is important to note that this information pertains to Bang Cookies Franchise, LLC's cash management practices as of December 31, 2023. A franchisee should inquire about the franchisor's current cash management policies and whether measures have been taken to mitigate the risk of exceeding FDIC insurance limits, such as diversifying deposits across multiple insured institutions. Understanding these practices can help a franchisee assess the financial stability and risk management strategies of the franchisor.