How does Bath Tune Up define 'cash' for financial statement purposes?

According to Bath Tune Up's 2025 Franchise Disclosure Document, the company considers cash on hand and deposits in banks as cash for financial statement purposes. This definition is important because it clarifies what Bath Tune Up includes when reporting its cash assets.

Additionally, the FDD notes that Bath Tune Up maintains some of its cash in U.S. noninterest-bearing transaction accounts, which are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 per depositor. As of December 31, 2022, the company's uninsured deposits in its deposit accounts with a U.S. bank totaled approximately $920,000.

Furthermore, the balance sheets cash balances also include advertising advances and deposits received from franchisees for the purpose of national advertising (NAF). These NAF funds totaled $289,874 and $319,041 as of December 31, 2024 and 2023, respectively. Bath Tune Up's policy is to designate these NAF funds in separate bank accounts, as the terms of the respective franchise agreements require the company to spend the cash on advertising costs to benefit the franchisees.

This definition is a standard accounting practice. A prospective franchisee should be aware of how cash is defined, as it impacts the overall financial picture presented in the financial statements. Understanding the composition of cash, including any amounts held for specific purposes like national advertising, provides a more complete view of Bath Tune Up's financial health.