What was the deferred franchise fees for Golden Krust Caribbean Restaurant in 2023?
Golden_Krust_Caribbean_Restaurant Franchise · 2024 FDDAnswer from 2024 FDD Document
| LIABILITIES AND SHAREHOLDERS' DEFICIT | |||
|---|---|---|---|
| CURRENT LIABILITIES: | |||
| Accounts payable | $ 880,096 | $ 602,792 | |
| 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 |
Source: Item 23 — RECEIPT (FDD pages 35–153)
What This Means (2024 FDD)
According to Golden Krust Caribbean Restaurant's 2024 Franchise Disclosure Document, the deferred franchise fees are divided into current and long-term portions. The current portion of deferred franchise fees for 2023 is $99,675, while the long-term portion is $857,346.
This means that Golden Krust Caribbean Restaurant collected franchise fees for services or rights that extend beyond the current year. The current portion represents the amount expected to be recognized as revenue within the next 12 months, while the long-term portion will be recognized in subsequent years.
For a prospective franchisee, this indicates the financial structure of how Golden Krust Caribbean Restaurant accounts for franchise fees, spreading revenue recognition over the period the franchisee benefits from the services or rights granted by the franchise agreement. Understanding these deferred amounts can provide insight into the company's revenue recognition practices and overall financial health.