What was the amount of advertising charges for Golden Krust Caribbean Restaurant in 2022?
Golden_Krust_Caribbean_Restaurant Franchise · 2024 FDDAnswer from 2024 FDD Document
| December 31, | ||
|---|---|---|
| 2022 | 2021 | |
| ASSETS | ||
| CURRENT ASSETS: | ||
| Cash and restricted cash | $ 1,357,728 | $ 451,809 |
| Accounts receivable, net of allowance for doubtful accounts | ||
| of $1,020,611 and $824,037 | 995,682 | 714,924 |
| Employee Retention Credit receivable | - | 580,958 |
| Notes receivable current portion | 23,773 | 18,148 |
| Inventory | 33,854 | 37,569 |
| Prepaid expenses | 10,593 | 46,501 |
| Total Current Assets | 2,421,630 | 1,849,909 |
| PROPERTY AND EQUIPMENT, Net | 229,140 | 269,584 |
| ROU OPERATING ASSETS | 568,892 | - |
| NONCURRENT ASSETS: | ||
| Due from related parties | 77,718 | 78,040 |
| Goodwill, Net of accumulated amortization of | ||
| $181,476 and $148,728, respectively | 145,999 | 178,747 |
| Notes receivable, net of current portion and allowance for | ||
| of $227,212 and $212,213 | 103,304 | 36,682 |
| Other noncurrent assets | 10,960 | 42,772 |
| Total Noncurrent Assets | 337,981 | 336,241 |
| Total Assets | $ 3,557,643 | $ 2,455,734 |
| LIABILITIES AND SHAREHOLDERS' DEFICIT | ||
| CURRENT LIABILITIES: | $ 880,096 | $ 602,792 |
| Accounts payable | ||
| Current lease liability - operating | 113,319 | - |
| Accrued expenses | 450,358 | 2,820,287 |
| Deferral of employment tax deposits and payments, current portion | - | 50,438 |
| Other current liabilities | 22,582 | 60,726 |
| Deferred franchise fees, current portion | 99,675 | 103,592 |
| Other Current Liabilities | 1,566,030 | 3,637,835 |
| LONG-TERM LIABILITIES: | ||
| Long-term lease liability - operating, less current maturities | 510,113 | - |
| Deferred franchise fees, less current portion | 857,346 | 948,479 |
| Amount owed to related parties | 5,725,747 | 4,121,472 |
| Total Long-term Liabilities | 7,093,206 | 5,069,951 |
| COMMITMENTS AND CONTINGENCIES | ||
| SHAREHOLDERS' DEFICIT | ||
| Common stock | 170,100 | 170,100 |
| Accumulated deficit | (5,271,693) | (6,413,086) |
| Accumulated other comprehensive loss | - | (9,066) |
| Total Shareholders' Deficit | (5,101,593) | (6,252,052) |
| Total Liabilities and Shareholders' Deficit | $ 3,557,643 | $ 2,455,734 |
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CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
| | Year Ended Decembe
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 for the year ending December 31, 2022, were $1,503,874. This reflects the amount Golden Krust Caribbean Restaurant collected from franchisees for advertising purposes during that year. These advertising charges are typically a percentage of the franchisees' sales, which franchisees contribute monthly.
This revenue is earmarked for franchise-related advertising initiatives. The funds are kept separate and cannot be used for Golden Krust Caribbean Restaurant's general operational costs, except as outlined in the FDD. The FDD also states that any unspent advertising revenues are included in accrued expenses on the balance sheets.
However, in both 2022 and 2023, Golden Krust Caribbean Restaurant spent more on advertising than it received in advertising revenue from its franchisees, resulting in no accrued advertising expenses at the end of those years. This indicates that Golden Krust Caribbean Restaurant is actively investing in advertising and marketing efforts to support its franchise system.