What was the (decrease) increase in notes receivable for Golden Krust Caribbean Restaurant in 2022?
Golden_Krust_Caribbean_Restaurant Franchise · 2024 FDDAnswer from 2024 FDD Document
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, Golden Krust Caribbean Restaurant's financial statements include information about balances due from related parties, but do not explicitly detail 'notes receivable'. The document mentions balances due from related parties through common ownership/management, primarily consisting of real estate holdings. These balances are classified as noncurrent assets because there are no scheduled repayment requirements. As of December 31, 2022, $77,718 was due from these related parties, while $78,040 was due from them as of December 31, 2021. This represents a decrease of $322 due from related parties in 2022.
However, the FDD does not use the term 'notes receivable' in relation to these figures. Instead, it describes them as amounts due from related parties for items like interest-bearing advances, lease payments, and operating expense allocations. These amounts are considered noncurrent assets due to the absence of fixed repayment schedules.
A prospective franchisee should ask Golden Krust Caribbean Restaurant for a detailed breakdown of all notes receivable, including the specific terms, related parties, and repayment schedules. Understanding the nature and collectability of these receivables is crucial for assessing the financial health of the franchisor.