Does Kidokinetics maintain cash in bank deposit accounts that may exceed federally insured limits?

According to Kidokinetics' 2024 Franchise Disclosure Document, Kidokinetics maintains cash in bank deposit accounts that, at times, may exceed federally insured limits. However, the company states that it has not experienced any losses in such accounts and believes it is not exposed to any significant credit risks on cash or cash equivalents.

For a prospective franchisee, this means that Kidokinetics' cash management practices involve holding funds in accounts that could potentially exceed the coverage provided by federal deposit insurance, such as the FDIC. While this is not inherently problematic, it does introduce a degree of risk, albeit one that Kidokinetics believes is not significant based on their experience.

It is common practice for businesses, including franchisors, to manage their cash in a way that optimizes returns and liquidity. This can sometimes involve using accounts that may not be fully insured. However, franchisees should be aware of this practice and may want to inquire about the specific banks and types of accounts Kidokinetics uses to manage its cash, as well as the measures Kidokinetics takes to mitigate any potential risk associated with uninsured deposits.