What was the amount of accounts payable for Golden Krust Caribbean Restaurant as of December 31, 2022?
Golden_Krust_Caribbean_Restaurant Franchise · 2024 FDDAnswer from 2024 FDD Document
al, and administrative expenses on the consolidated statements of operations, were $145,391 and $177,151 during 2022 and 2021, respectively.
During 2022 and 2021, Bakery sales to the Company-owned restaurants aggregated approximately $922,000 and $1,145,000, respectively.
The Company also entered into an agreement with Bakery, whereby any related party receivables or payables will accrue interest at a rate of 1% per annum on any balances between the two companies. At December 31, 2022 and 2021 there were amounts due between the two companies of $4,657,186 and $3,691,201, respectively. Interest on these balances, charged to interest expense in the statements of operations totaled $44,614 and $40,375 for 2022 and 2021, respectively.
The Company also has balances due from (to) related parties, through common ownership/management. These related parties consist mainly of real estate holdings that are not consolidated in these financial statements. A total of $913,125 and $274,191 are due to, and $77,718 and $78,040 are due from these related parties as of December 31, 2022 and 2021, respectively. These amounts primarily consist of interest-bearing advances for working capital, lease pay
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 35)
What This Means (2024 FDD)
Based on the 2024 Franchise Disclosure Document, the financial statements of Golden Krust Caribbean Restaurant do not explicitly list the total accounts payable as of December 31, 2022. However, the document does detail balances due to related parties. Specifically, there were amounts due between Golden Krust Franchising, Inc. and Golden Krust Caribbean Bakery, Inc. of $4,657,186 as of December 31, 2022. Additionally, $913,125 was due to other related parties, while $77,718 was due from these parties. These related party balances primarily consist of interest-bearing advances for working capital, lease payments, and allocation of operating expenses.
These figures are important for a prospective franchisee to understand because they provide insight into the financial relationships between Golden Krust Franchising, Inc. and its related entities. The amounts due to related parties could represent significant liabilities for the company. It is also noted that the balances due to and from related parties are classified as noncurrent assets and long-term liabilities because there are no scheduled repayment requirements.
To gain a comprehensive understanding of Golden Krust Caribbean Restaurant's accounts payable, a prospective franchisee should request a complete copy of the audited financial statements. This would include a detailed breakdown of all current and long-term liabilities, including accounts payable to both related and unrelated parties. Understanding the nature and terms of these liabilities is crucial for assessing the financial health and stability of the franchise system.