Does Crave maintain cash in bank deposit accounts that could exceed federally insured limits?
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, Crave maintains its cash in bank deposit accounts, which could exceed federally insured limits. However, Crave states that it 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. Because of this, Crave believes it is not exposed to any significant credit risk on cash and cash equivalents.
For a prospective franchisee, this means that while Crave's cash holdings may at times surpass the amounts insured by the FDIC or similar agencies, the company has a history of not exceeding those limits and has not incurred losses due to this practice. This indicates that Crave management is likely aware of and managing the risks associated with holding cash in excess of insured limits.
While this information pertains to Crave's financial practices, it does not directly impact the franchisee's own cash management. However, it may be prudent for a potential franchisee to inquire about Crave's cash management policies and risk mitigation strategies to gain a better understanding of the company's financial practices.