What was the total advertising expense reflected in Gold Star's consolidated financial statements for 2022?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
$_ | 8,065,153 | $ | 6,193,189 | $ | 6,117,194 | |
NOTE 16 - PROFIT SHARING EXPENSE
Profit sharing / 401(k) expense was $64,584, $73,246, and $65,823 for the
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, the total advertising expense reflected in the company's consolidated financial statements for 2022 was $996,584. The FDD also provides the advertising expenses for 2023 and 2024, which were $921,454 and $886,959, respectively.
It's important to note that Gold Star Chili Advertising Association, Inc., a separate legal entity, handles the majority of advertising and marketing services for franchisees. Gold Star acts as a conduit, collecting advertising contributions from franchisees and disbursing the funds to this advertising entity. Consequently, the consolidated financial statements of Gold Star do not reflect income or expenses from this pass-through function. The amount listed in the financial statements reflects Gold Star's contribution to the advertising entity specifically for marketing research and product development.
For a prospective franchisee, this means that the advertising expenses listed in Gold Star's financial statements do not represent the total advertising spend for the Gold Star system. A significant portion of advertising is managed through the advertising association, funded by franchisee contributions. Understanding the structure and activities of the advertising association is crucial for franchisees to assess the marketing support they will receive and the associated costs.