For Carvel, what is included in the definition of 'cash and cash equivalents'?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
Cash and Cash Equivalents
Cash and cash equivalents includes funds not subject to the restrictions discussed in the "Restricted Cash" section. As of December 29, 2024 and December 31, 2023, Cash and cash equivalents consists only of funds on deposit with commercial banks.
Restricted Cash
The Company's restricted cash is comprised of cash collections related to securitized franchising or licensing activities.
Source: Item 23 — Receipts (FDD pages 100–353)
What This Means (2025 FDD)
According to Carvel's 2025 Franchise Disclosure Document, the definition of 'cash and cash equivalents' evolved between 2023 and 2024. The FDD states that as of December 29, 2024, and December 31, 2023, cash and cash equivalents consisted only of funds on deposit with commercial banks.
However, the 2025 FDD also states that cash and cash equivalents includes highly liquid investments purchased with an original maturity of three months or less. Furthermore, as of December 29, 2024, and December 31, 2023, cash and cash equivalents consisted of funds on deposit with commercial banks and money market mutual fund accounts.
Therefore, the definition of cash and cash equivalents for Carvel includes not only funds in commercial banks but also highly liquid investments with short-term maturities and money market mutual fund accounts. Prospective franchisees should understand how Carvel manages its cash and equivalents, as it reflects the company's liquidity and short-term financial health.