What was the amount of other income (expense) for Golden Krust Caribbean Restaurant in 2021?
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 | ||
| IN |
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 total other income (expense), net, for the company in 2021 was $1,100,522. This figure is derived from several components, including interest income of $4,634, an employee retention credit of $580,958, related party loan forgiveness of $567,961, interest expense of ($40,408), and other income (expense) of ($12,623).
The employee retention credit and related party loan forgiveness significantly contributed to the other income for Golden Krust Caribbean Restaurant in 2021. These items are one-time in nature and may not be available in the future. Interest income and expense are more typical components of other income (expense).
Prospective franchisees should consider that the substantial other income in 2021 may not be indicative of ongoing financial performance. It is important to review the components of other income (expense) to understand the sustainability of these items. Franchisees should also inquire about the details of the employee retention credit and related party loan forgiveness to assess their impact on the company's financial stability.