How are Exit's available-for-sale securities measured?

According to Exit's 2025 Franchise Disclosure Document, available-for-sale securities are measured at fair value on a recurring basis using Level 1 inputs. The FDD states that there were no changes in the methodologies used at December 31, 2024, 2023, and 2022. This indicates that Exit consistently uses the same method for determining the fair value of these securities over the past three years.

Specifically, Exit's investments available-for-sale consist of brokered certificates of deposit placed with Thrivent. These investments are carried in the financial statements at fair value. The FDD includes a table that details the amortized cost, fair value, and the gross unrealized holding gains and losses recognized in accumulated other comprehensive income (loss) on these available-for-sale securities as of December 31 for the years 2024, 2023, and 2022.

For a prospective franchisee, this information provides insight into how Exit manages its investments and reports their value. Understanding the fair value measurement and the consistency of the methodology can help in assessing the financial stability and transparency of the company. The use of Level 1 inputs suggests a reliance on readily available market data for valuation, which is generally considered a reliable approach.