What does Chatime management believe will limit the company's exposure to credit risk regarding its cash?

According to Chatime's 2025 Franchise Disclosure Document, Chatime management believes its policy of placing cash with a major financial institution will limit the company's exposure to credit risk. The disclosure notes that the company's cash may at times exceed Federal Deposit Insurance Corporation (FDIC) insurance limits.

This indicates that Chatime is aware of the potential risk associated with holding large sums of cash and has taken steps to mitigate that risk by depositing funds in a well-established financial institution. While the FDD does not specify which institution, the implication is that it is one deemed stable and reliable.

For a prospective franchisee, this suggests that Chatime is attentive to financial risk management. However, it's important to note that even with this policy, there remains a degree of risk, particularly when cash holdings exceed FDIC limits. A franchisee may want to inquire about the specific financial institution used by Chatime and the extent to which the company's cash deposits are insured.