What was the income (loss) from operations 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 income (loss) from operations in 2021 was a loss of $1,737,802. This figure reflects the financial performance of Golden Krust Caribbean Restaurant's operations before considering other income, expenses, or taxes.
For a prospective franchisee, this operational loss in 2021 could signal potential challenges in the business model or market conditions during that period. It's important to investigate the factors contributing to this loss, such as high operating expenses or lower-than-expected revenues. Understanding the reasons behind the loss can help a franchisee assess the risks and opportunities associated with investing in a Golden Krust Caribbean Restaurant franchise.
However, it is important to note that in 2022, Golden Krust Caribbean Restaurant had an income from operations of $1,105,787. This significant turnaround suggests that the company may have implemented strategies to improve its operational efficiency and profitability. A potential franchisee should inquire about these strategies and their impact on the overall financial health of the franchise.
It is also important to consider that the financial performance of a franchise can vary depending on factors such as location, management, and local market conditions. Therefore, while the historical financial data provides valuable insights, it is essential for prospective franchisees to conduct their own due diligence and seek professional advice before making any investment decisions.