What is Mr. Sandless' policy regarding cash accounts exceeding the FDIC limit?
Mr_Sandless Franchise · 2025 FDDAnswer from 2025 FDD Document
es as well as continuing royalties to the Company based upon a percentage of sales. Under this arrangement, franchisees are granted the right to operate a Mr. Sandless franchise business for a specified number of years.
Concentration of Credit Risk-Financial instruments that potentially expose the Company to concentration of credit risk primarily consist of cash and cash equivalents and franchisee accounts receivable. The bal
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 41–42)
What This Means (2025 FDD)
According to Mr. Sandless' 2025 Franchise Disclosure Document, the company's policy regarding cash accounts is that the balances in its cash accounts do not exceed the Federal Deposit Insurance Corporation (FDIC) limit of $250,000. This statement is based on the company's financial position as of December 31, 2023. Mr. Sandless maintains its cash and cash equivalents with accredited financial institutions. This indicates that the company spreads its cash holdings across multiple institutions to ensure that its deposits remain within the FDIC insured limit.
For a prospective franchisee, this policy suggests that Mr. Sandless is mindful of managing its financial risks related to cash holdings. The FDIC insurance limit is designed to protect depositors in the event of a bank failure, and by staying within this limit, Mr. Sandless ensures that its cash assets are fully protected. This can be seen as a sign of prudent financial management.
However, it is important to note that this information pertains to Mr. Sandless' corporate cash accounts and not necessarily the franchisee's cash accounts. As a franchisee, you would need to manage your own cash accounts and ensure compliance with FDIC limits independently. It would be prudent for a prospective franchisee to inquire about any specific recommendations or requirements Mr. Sandless might have regarding the handling of franchisee cash accounts, especially if large sums of money are expected to be processed through these accounts.