What does Dermani Medspa consider to be cash equivalents?
Dermani_Medspa Franchise · 2025 FDDAnswer from 2025 FDD Document
lients with laser hair removal, skin rejuvenation, chemical peels, dermaplaning, injections, and other products.
As of December 31, 2024, there were twenty two franchise centers in operation.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The financial statements of the Company are presented using the accrual basis of accounting whereby revenues are recognized when they are earned, and expenses are recognized when they are incurred. The Company follows accounting principles generally accepted in the United States of America.
Estimate
Source: Item 23 — RECEIPTS (FDD pages 66–311)
What This Means (2025 FDD)
According to Dermani Medspa's 2025 Franchise Disclosure Document, the company considers cash and cash equivalents to include cash at banks and highly liquid investments with original maturities of three months or less. Dermani Medspa maintains its cash balances at one bank, and these balances are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000. The FDD also mentions that Dermani Medspa holds system-wide marketing fees collected in a restricted cash account, which can only be used for specified advertising-related expenses as outlined in the franchise agreements.
For a prospective franchisee, understanding how Dermani Medspa defines and manages its cash and cash equivalents is important for assessing the company's financial health and stability. Knowing that cash balances are maintained at a single bank and are FDIC-insured up to $250,000 provides a level of security. Additionally, the existence of a restricted cash account for marketing fees indicates that these funds are specifically earmarked for advertising and promotional activities, which benefits the franchise system as a whole.
It is also important to note that the Dermani Medspa's financial statements are prepared using the accrual basis of accounting, where revenues are recognized when earned and expenses are recognized when incurred. This accounting method provides a more accurate picture of the company's financial performance over time compared to the cash basis of accounting. Prospective franchisees should review the financial statements and related notes carefully to understand Dermani Medspa's financial position and performance.