Where does Chatime place its cash reserves?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
NOTE 6. CONCENTRATIONS OF CREDIT RISK
Cash
The Company places its cash, which may at times be in excess of Federal Deposit Insurance Corporation insurance limits, with a major financial institution. Management believes that this policy will limit the Company's exposure to credit risk.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, Chatime places its cash reserves with a major financial institution. The document states that these cash holdings may, at times, exceed the limits insured by the Federal Deposit Insurance Corporation (FDIC).
Chatime's management believes that placing its cash with a major financial institution will limit the company's exposure to credit risk. This indicates that Chatime prioritizes the safety and security of its cash reserves by entrusting them to a reputable institution.
For a prospective franchisee, this information suggests that Chatime is taking steps to manage its financial risks by carefully selecting where it holds its cash. While the FDD does not name the specific financial institution, the franchisee can take comfort in knowing that Chatime is aware of the risks associated with holding cash, especially amounts exceeding FDIC insurance limits, and has a policy in place to mitigate those risks.