What is the maximum amount of deposits Best Brains can hold in interest-bearing accounts with a financial institution that is a shareholder of the FDIC before it is considered a concentration of credit risk?
Best_Brains Franchise · 2025 FDDAnswer from 2025 FDD Document
is recognized as a benefit only if it is "more likely than not" that the tax position would be sustained in a
NOTES TO FINANCIAL STATEMENTS.
tax examination, with the tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the "more likely than not" test, no tax benefit is recorded.
Current tax expenses for th
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 42)
What This Means (2025 FDD)
According to Best Brains' 2025 Franchise Disclosure Document, the company considers cash deposits greater than $250,000 in interest-bearing accounts with any single financial institution that is a shareholder of the FDIC to be a concentration of credit risk.
This means that if Best Brains holds more than $250,000 in such an account, there is a potential risk to the company if that financial institution were to fail. The FDD indicates that management regularly reviews the company's cash management policies and believes the risk of any potential loss is minimal.
For a prospective franchisee, this information is relevant because it provides insight into how Best Brains manages its own financial risks. While this specifically applies to the franchisor's financial practices, it can indirectly affect franchisees if the franchisor experiences financial difficulties. Franchisees may want to inquire about the specific banks Best Brains uses and their financial stability as part of their due diligence.