What does Crave consider to be included within the definition of 'cash and cash equivalents'?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
Cash and cash equivalents include all cash balances on deposit with financial institutions and highly liquid investments with a maturity of three months or less at the date of acquisition.
The Company maintains its cash in bank deposit accounts which could exceed federally insured limits. The Company has not experienced an instance where cash held in the account exceeded insured limits since their inception and have not had losses in such accounts. The Company believes it is not exposed to any significant credit risk on cash and cash equivalents.
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, cash and cash equivalents are defined as all cash balances on deposit with financial institutions and highly liquid investments with a maturity of three months or less at the date of acquisition. This definition is important for prospective franchisees as it clarifies how Crave accounts for its liquid assets in its financial statements.
This definition is a standard accounting practice, ensuring that only the most readily available assets are classified as cash equivalents. The inclusion of highly liquid investments with a short maturity period reflects the company's ability to quickly convert these investments into cash.
The FDD also notes that Crave maintains its cash in bank deposit accounts, which could exceed federally insured limits. However, Crave states that it has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents. This provides some reassurance, though franchisees may want to inquire further about Crave's risk management practices regarding cash deposits.