What is the Federal Deposit Insurance Company's (FDIC) insurance limit mentioned in Fitstop's financial statements?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
nts*-The Company's franchise arrangements generally include a license which provides for payments of initial fees as well as continuing royalties to the Company based upon a percentage of sales. Under this arrangement, franchisees are granted the right to operate franchise business for a specified number of years.
Concentration of Credit Risk- Financial instruments that potentially expose the Company to concentration of cred
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, the company's cash account balances as of December 31, 2023, and 2022 did not exceed the Federal Deposit Insurance Company's (FDIC) insurance limit. The FDIC insurance limit is $250,000. Fitstop maintains its cash and cash equivalents with accredited financial institutions.
This means that Fitstop's cash deposits were fully insured by the FDIC up to the standard limit. For a prospective franchisee, this indicates that Fitstop manages its cash in a way that minimizes risk by keeping balances within FDIC-insured limits. This is a common and prudent practice for businesses of all sizes.
While this information pertains to Fitstop's financial practices, it indirectly assures franchisees that the company is taking measures to protect its assets. Franchisees may want to inquire about the specific financial institutions Fitstop uses and their policies regarding cash management to ensure their own funds are similarly protected when dealing with the company.