What was the reported amount for 'Gift Card Liability' for Gold Star as of 2023?
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' E |
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 gift card liability as of December 31, 2023, was $64,009. This figure represents the total balance of outstanding gift cards issued since September 2017, which is when the current owner acquired the brand.
This liability signifies the financial obligation Gold Star has to customers holding unredeemed gift cards. It reflects the amount of revenue Gold Star has already received for goods or services yet to be delivered. For a prospective franchisee, understanding the gift card liability is important because it impacts the overall financial health and balance sheet of the company. A high gift card liability could indicate a large future obligation, while a lower liability might suggest fewer outstanding gift cards.
It's also worth noting that Gold Star has an obligation to honor gift cards purchased before the acquisition date in September 2017. However, based on historical data, the company estimates that only a nominal amount of these older gift cards will be redeemed. Therefore, Gold Star does not record any additional liability for gift cards purchased before the acquisition date. The amounts paid on these pre-acquisition gift cards in 2024, 2023, and 2022 were considered immaterial to the overall financial statements.