Does Golden Krust Caribbean Restaurant have any finance leases as of December 31, 2023 and 2022?
Golden_Krust_Caribbean_Restaurant Franchise · 2024 FDDAnswer from 2024 FDD Document
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (Continued)
Leases:
The Company leases office space and two restaurant locations and determines if an arrangement is a lease at inception. Operating leases are included in ROU operating asset, current lease liability – operating, and long-term liability – operating on the consolidated balance sheet for the year ended December 31, 2022. The Company does not have any finance leases as of December 31, 2022
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 35)
What This Means (2024 FDD)
According to the 2024 Franchise Disclosure Document, Golden Krust Caribbean Restaurant did not have any finance leases as of December 31, 2022. The document states that operating leases are included in ROU (Right-of-Use) operating assets, current lease liability – operating, and long-term liability – operating on the consolidated balance sheet for the year ended December 31, 2022.
For potential franchisees, this means that Golden Krust Caribbean Restaurant's financial statements for 2022 do not reflect any obligations related to assets acquired through finance leases. Instead, the company's lease obligations are categorized as operating leases, which are treated differently under accounting standards.
The document does not explicitly state whether Golden Krust Caribbean Restaurant had any finance leases as of December 31, 2023. Therefore, it is advisable that prospective franchisees seek clarification from the franchisor regarding the presence of any finance leases in the 2023 financial statements to gain a comprehensive understanding of the company's financial obligations.