What amount of Itan's cash was in excess of the FDIC limit as of December 31, 2023?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
ties - The Company follows the alternative accounting standard for private companies with respect to entities under common control. As such, entities under common control have not been evaluated under the guidance in the variable interest subsections of the Financial Accounting Standards Board ("FASB") ASC 810.
Fair value measurements - The Company follows accounting standards consistent with the FASB codification which defines fair value, establishes a framework for measuring fair value and enhances disclosures about fair value measurements for all fi
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, the company had $104,387 in cash deposits exceeding the Federal Deposit Insurance Corporation (FDIC) limit as of December 31, 2023. The FDIC insures deposits up to $250,000 per bank. This means that Itan held cash balances at a regional bank that surpassed the insured amount by $104,387 at the end of 2023.
For a prospective Itan franchisee, this detail indicates the franchisor's cash management practices. While the franchisor believes they are not exposed to significant credit risk, it's important to understand where Itan holds its cash and whether the amount exceeding the FDIC limit is typical or represents a potential risk. Franchisees may want to inquire about the franchisor's strategy for managing cash balances above the insured limit and the reasons for holding such amounts.
It's also worth noting that the amount exceeding the FDIC limit was $0 as of December 31, 2022. The increase to $104,387 by the end of 2023 could reflect changes in Itan's financial performance or cash management strategy. A prospective franchisee should consider this change when evaluating the franchisor's financial stability and risk management practices.