What was the change in deferred franchise fees for Gold Star in 2024?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
solidated financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the consolidated financial statements as a whole.
Prior Period Financial Statements
Dean Dotton allen Ford, PUC
The financial statements as of December 31, 2022, were audited by VonLehman & Company Inc., who merged with Dean Dorton Allen Ford, PLLC as of January 1, 2024.
Fort Wright, Kentucky
April 8, 2025
GOLD STAR CHILI, INC. CONSOLIDATED BALANCE SHEETS
ASSETS
| $ | | | | $ | |---|---|---|---|---| | | - | - | - | |
GOLD STAR CHILI, INC. CONSOLIDATED BALANCE SHEETS (Continued)
LIABILITIES AND STOCKHOLDERS' EQUITY
| December 31, | |||
|---|---|---|---|
| 2022 | |||
| 2024 | 2023 | (Restated) | |
| Current Liabilities | |||
| Line of Credit | 100,008 | 92,581 | 1,681,630 |
| $ | $ | $ | |
| Installment Note Payable | 766,667 | 716,667 | 853,334 |
| Bank Overdraft | - | - | 432,410 |
| Accounts Payable Operating | 572,199 | 1,327,330 | 285,729 |
| Operating Lease Liabilities | 928,298 | 763,866 | 715,942 |
| Gift Card Liability | 70,167 | 64,009 | 61,100 |
| Accrued Wages and Related Liabilities | 380,675 | 119,149 | 92,363 |
| Accrued Expenses and Other Liabilities | 13,828 | 219,612 | 179,127 |
| Deferred Franchise Fees | 15,875 | 24,792 | 21,100 |
| Total Current Liabilities | 2,847,717 | 3,328,006 | 4,322,735 |
| Long-Term Liabilities (Less Current Portion) | |||
| Line of Credit | 1,399,992 | 802,996 | - |
| Installment Note Payable | 11,265,209 | 11,960,050 | 9,758,197 |
| Operating Lease Liabilities | 10,530,569 | 9,734,197 | 9,172,388 |
| Deferred Franchise Fees | 65,908 | 74,817 | 105,067 |
| Total Long-Term Liabilities | 23,261,678 | 22,572,060 | 19,035,652 |
| Total Liabilities | 26,109,395 | 25,900,066 | 23,358,387 |
| Stockholders' Equity | |||
| Gold Star Chili, Inc. Stockholders' Equity | |||
| Common Stock, No Par Value; 10,000 Shares | |||
| Authorized, Issued and Outstanding | 1,000 | 1,000 | 1,000 |
| Paid-In Capital | 212,680 | 212,680 | 212,680 |
| Retained (Deficit) Earnings | (537,818) | (295,263) | 350,576 |
| Accumulated Other Comprehensive Income (Loss) | 194,930 | 132,610 | 389,268 |
| Total Gold Star Chili, Inc. |
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, the company's deferred franchise fees, a liability on the balance sheet, changed between 2023 and 2024. In 2023, the deferred franchise fees totaled $24,792, while in 2024, they decreased to $15,875. This represents a decrease of $8,917 in deferred franchise fee liability for Gold Star.
Deferred franchise fees typically represent initial franchise fees that Gold Star has collected from franchisees but has not yet recognized as revenue. This is because Gold Star has ongoing obligations to provide services or support to the franchisee over a period of time. As Gold Star fulfills these obligations, the deferred revenue is recognized as earned revenue on the income statement.
The decrease in deferred franchise fees could be due to a number of factors, such as fewer new franchises being sold in 2024 compared to 2023, or Gold Star recognizing more of its deferred revenue as earned revenue during 2024. A prospective franchisee should consider this change in the context of Gold Star's overall financial performance and growth strategy. Understanding the trend in deferred revenue can provide insights into the company's sales and revenue recognition practices.
It is important to note that deferred franchise fees are a liability, meaning they represent an obligation of Gold Star to provide future services. A significant decrease in this liability could indicate a change in the company's business model or its relationship with franchisees. Therefore, prospective franchisees should carefully review Gold Star's financial statements and ask the franchisor for clarification on any significant changes in deferred franchise fees.