What does Benjamin Franklin Plumbing consider to be cash and cash equivalents?

According to the 2025 Benjamin Franklin Plumbing FDD, the company defines cash and cash equivalents as all cash and highly liquid investments with an initial maturity of three months or less. This is a standard accounting practice, as it reflects assets that can be quickly converted to cash.

The FDD specifies that cash primarily consists of cash on hand and cash on deposit. Benjamin Franklin Plumbing maintains its cash in banks, and these deposits may, at times, exceed federally insured limits. However, the company states it has not experienced any losses in these accounts and believes it is not exposed to significant credit risks related to its cash management practices.

For a prospective franchisee, this definition is important for understanding the company's financial statements and how it manages its liquid assets. Knowing that Benjamin Franklin Plumbing considers short-term investments with maturities of three months or less as cash equivalents provides a clearer picture of the company's liquidity position. Additionally, the disclosure about maintaining cash in banks that may exceed federally insured limits, while not presenting a current risk, is something a franchisee might want to monitor as they assess the overall financial health and risk management of the company.