What was the employee retention credit amount for Golden Krust Caribbean Restaurant in 2022?
Golden_Krust_Caribbean_Restaurant Franchise · 2024 FDDAnswer from 2024 FDD Document
| CASH FLOWS PROVIDED BY (USED FOR): | 2022 | 2021 |
|---|---|---|
| OPERATING ACTIVITIES: | ||
| Net income (loss) | $ 1,141,393 | $ (659,030) |
| Adjustments to reconcile net income (loss) to net cash and | ||
| restricted cash (used for) provided by operating activities: | ||
| Related party loan forgiveness | - | (567,961) |
| Depreciation and amortization expense | 91,007 | 106,297 |
| Non-cash lease expense | 54,540 | - |
| Bad debt expense (recoveries) | 196,574 | (490,229) |
| Change in allowance for notes receivable | 14,999 | (61,613) |
| Loss on disposal of equipment | 3,400 | 14,800 |
| Changes in certain assets and liabilities: | ||
| Accounts receivable | (477,332) | 343,400 |
| Inventory | 3,715 | (2,414) |
| Prepaid expenses | 35,908 | (40,254) |
| Other noncurrent assets | 31,812 | (456) |
| Accounts payable | 277,304 | (56,591) |
| Accrued expenses | (2,369,929) | 2,087,305 |
| Deferred franchise fees | (95,050) | 85,408 |
| Other current liabilities | (38,144) | 12,604 |
| Deferral of employment tax deposits and payments | (50,438) | (50,433) |
| Employee retention credit | 580,958 | (580,958) |
| Net Cash (Used for) Provided By Operating Activities | (599,283) | 139,875 |
Source: Item 23 — RECEIPT (FDD pages 35–153)
What This Means (2024 FDD)
According to the 2024 Franchise Disclosure Document, Golden Krust Caribbean Restaurant had an employee retention credit of $580,958 in 2022. This credit is listed as an adjustment to reconcile net income to net cash used by operating activities.
For a prospective franchisee, the employee retention credit can be viewed as a one-time benefit that Golden Krust Caribbean Restaurant received. It is important to note that this credit may not be available in the future, as it is subject to changes in government regulations and eligibility requirements. Therefore, franchisees should not rely on this credit as a recurring source of income.
Understanding the details behind this credit and its impact on the franchisor's financial statements can provide valuable insights into the financial health of Golden Krust Caribbean Restaurant. However, prospective franchisees should conduct their own due diligence and consult with financial advisors to assess the long-term financial viability of the franchise opportunity.