What were the distributions for Gold Star in the year ended December 31, 2024?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
| | Cash Used by Financing Activities | (2,565,195) (70,677) | (830,111) | | | Net Change in Cash | 3 72,314 (640,410) | 1 68,528 | | Beginning Cash Balance | 1,218,648 1,859,058 | 1,690,530 | | | Ending Cash Balance | $ 1 ,590,962 $ 1 ,218,648 | $ 1 ,859,058 | | Cash Flows From Financing Activities | | | | | Change in Line of Credit | (92,581) 1 12,437 | 1,681,630 | | Proceeds From Installment Note Payable | | - 1,833,832 | - | | Payments on Installment Note Payable | (658,333) (632,321) | (853,334) | | Distributions | (1,814,281) (1,384,625) | (1,658,407) |
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, the distributions for the year ended December 31, 2024, were $(1,814,281). This figure represents the cash outflow from Gold Star to its owners or shareholders during that period. Distributions are typically made from the company's profits but can also include returns of capital. The distributions are a component of the cash flows from financing activities. This indicates how much cash was used for distributions to the owners.
For a prospective franchisee, understanding the franchisor's distribution history can provide insights into the financial stability and profitability of the company. While distributions can be a sign of success, it's important to consider them in the context of the company's overall financial health, including its net income, debt levels, and investment activities. A high distribution rate might reduce the funds available for reinvestment in the business, potentially impacting future growth and support for franchisees.
It is important to note that the distributions are part of the consolidated statement of cash flows, which includes Gold Star Chili, Inc., its subsidiary TCWW, LLC, and its consolidated entity, GSC Properties, LLC. Therefore, the distribution figure reflects the combined financial activities of these entities. A potential franchisee should review the entire financial statement and consult with a financial advisor to fully understand the implications of these distributions and how they might affect the franchise system's long-term viability.