What was the advertising charges revenue for Golden Krust Caribbean Restaurant in 2022?
Golden_Krust_Caribbean_Restaurant Franchise · 2024 FDDAnswer from 2024 FDD Document
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CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
| Year Ended December 31, 2022 | 2021 | |
|---|---|---|
| REVENUES | ||
| Royalties | $ 3,566,598 $ | 3,041,453 |
| Advertising Charges | 1,503,874 | 982,160 |
| Franchising Fees | 95,050 | 99,592 |
| Total Franchise Revenues | 5,165,522 | 4,123,205 |
| Company owned restaurant sales | 2,896,104 | 2,976,981 |
| Cost of sales | (1,226,078) | (1,226,592) |
| Restaurant Gross Profit | 1,670,026 | 1,750,389 |
| Total Gross Profit | 6,835,548 | 5,873,594 |
| SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES | 5,729,761 | 7,611,396 |
| INCOME (LOSS) FROM OPERATIONS | 1,105,787 | (1,737,802) |
| OTHER INCOME (EXPENSE): | ||
| Interest income | 8,756 | 4,634 |
| Employee retention credit | - | 580,958 |
| Related party loan forgiveness | - | 567,961 |
| Interest expense | (51,235) | (40,408) |
| Other income (expense) | 6,208 | (12,623) |
| Total Other (Expense) Income, net | (36,271) | 1,100,522 |
| INCOME (LOSS) BEFORE PROVISION FOR | ||
| INCOME TAXES | 1,069,516 | (637,280) |
| RECOVERIES OF (PROVISION FOR) INCOME TAXES | 71,877 | (21,750) |
| NET INCOME (LOS |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 35)
What This Means (2024 FDD)
According to Golden Krust Caribbean Restaurant's 2024 Franchise Disclosure Document, the advertising charges revenue for the year ending December 31, 2022, was $1,503,874. This revenue is collected from franchisees as a percentage of their sales and is earmarked for advertising and promotional activities related to the Golden Krust Caribbean Restaurant brand.
The advertising fund is maintained separately from Golden Krust Caribbean Restaurant's general operating funds. These funds are specifically used for franchise-related advertising initiatives. According to the FDD, these funds cannot be used to cover the company's general operating expenses, except as explicitly described in the FDD.
The financial statements indicate that as of December 31, 2022, there were no accrued advertising expenses, meaning Golden Krust Caribbean Restaurant spent more on advertising than it collected in advertising revenue from its franchisees during that period. This suggests a potential benefit for franchisees, as the franchisor invested more in advertising than required by franchisee contributions.