What was the reported amount for Gold Star gift card liability for 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' 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 gift card liability for 2023 was $64,009. This figure represents the balance of unredeemed gift cards issued since September 2017, when the current owner acquired the brand. The gift card liability is a current liability, meaning Gold Star expects to settle this obligation within one year.
This liability reflects Gold Star's obligation to provide goods or services in the future for gift cards that have already been purchased. The company tracks and reports this liability to accurately represent its financial obligations. The FDD also notes that while Gold Star is obligated to honor gift cards purchased before the acquisition date, they estimate that only a nominal amount of these older gift cards will be redeemed, and therefore, no additional liability was recorded for them.
For a prospective franchisee, understanding the gift card program and its associated liabilities is important. It demonstrates how Gold Star manages its financial obligations related to stored value programs. The gift card liability is a relatively small portion of Gold Star's total current liabilities, which amounted to $3,328,006 in 2023. This suggests that while the gift card program is active, it does not represent a significant financial risk to the company.