What amount of restricted cash did Benjamin Franklin Plumbing hold as of December 31, 2024?
Benjamin_Franklin_Plumbing Franchise · 2025 FDDAnswer from 2025 FDD Document
Accounting Standards Update ("ASU") 2016-15 Statement of Cash Flows (Topic 230), cash payments made not soon after (defined as more than three months) the acquisition date of a business combination to settle any contingent consi
Source: Item 22 — CONTRACTS (FDD pages 87–88)
What This Means (2025 FDD)
According to Benjamin Franklin Plumbing's 2025 Franchise Disclosure Document, as of December 31, 2024, the company held $5,631 in restricted cash. This cash is held under the requirements of certain corporate insurance plans and as collateral in connection with the purchasing card program. In comparison, as of December 31, 2023, the company held $3,314 in restricted cash.
Restricted cash, in this context, is not freely available for Benjamin Franklin Plumbing's general use. Instead, it is earmarked for specific purposes dictated by insurance and purchasing card agreements. This arrangement provides security to the insurance companies and the providers of the purchasing card program, ensuring that Benjamin Franklin Plumbing can meet its obligations under those agreements.
For a prospective Benjamin Franklin Plumbing franchisee, this indicates that the franchisor maintains certain financial arrangements that require them to hold cash in reserve. While this does not directly impact the franchisee's operations, it reflects the franchisor's financial management practices and their ability to meet obligations. Franchisees may want to inquire about the specific terms of these insurance and purchasing card programs to understand the implications for the broader franchise system.