What was the increase (decrease) in due from related party for Golden Krust Caribbean Restaurant in 2022?
Golden_Krust_Caribbean_Restaurant Franchise · 2024 FDDAnswer from 2024 FDD Document
nd 2022.
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GOLDEN KRUST FRANCHISING, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2023 AND 2022
| 2023 | 2022 | ||
|---|---|---|---|
| CASH FLOWS FROM OPERATING ACTIVITIES | |||
| Net Income | $ | 82,149 | $ 1,141,393 |
| Adjustments to Reconcile Net Income to Net Cash | |||
| Used by Operating Activities: | |||
| Depreciation and Amortization Expense | 71,983 | 91,007 | |
| Noncash Lease Expense | 4,432 | 54,540 | |
| Bad Debt Expense | 606,734 | 196,574 | |
| Change in Allowance for Notes Receivable | - | 14,999 | |
| Loss on Disposal of Equipment | 92,339 | 3,400 | |
| (Increase) Decrease in Operating Assets: | |||
| Accounts Receivable | (614,033) | (477,332) | |
| Inventory | 5,837 | 3,715 | |
| Prepaid Expenses | 2,638 | 35,908 | |
| Other Noncurrent Assets | - | 31,812 | |
| Increase (Decrease) in Operating Liabilities: | |||
| Accounts Payable | (244,516) | 277,304 | |
| Accrued Expenses | (19,736) | (2,369,929) | |
| Deferred Franchise Fees | (36,508) | (95,050) | |
| Other Current Liabilities | (13,254) | (38,144) | |
| Deferral of Employment Tax Deposits and Payments | - | (50,438) | |
| Employee Retention Credit | - | 580,958 | |
| Net Cash Used by Operating Activities | (61,935) | (599,283) | |
| CASH FLOWS FROM INVESTING ACTIVITIES | |||
| Purchases of Property and Equipment | (25,444) | (21,215) | |
| Net Cash Used by Investing Activities | (25,444) | (21,215) | |
| CASH FLOWS FROM FINANCING ACTIVITIES | |||
| Increase (Decrease) in Notes Receivable | 25,274 | (87,246) | |
| Borrowings on Note Payable - Related Party | 5,180,961 | - | |
| Repayments on Note Payable - Related Party | (84,410) | - | |
| Increase (Decrease) in Due from Related Party | (24,491) | 322 | |
| Increase (Decrease) in Due to Related Parties | (5,598,977) | 1,604,275 | |
| Net Cash Provided (Used) by Financing Activities | (501,643) | 1,517,351 | |
| EFFECT OF FOREIGN CURRENCY EXCHANGE RATE ON CASH | - | 9,066 | |
| NET CHANGE IN CASH AND RESTRICTED CASH | (589,022) |
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 increase (decrease) in due from related party in 2022 was $322. This figure is derived from the cash flow statement, which tracks the movement of cash both into and out of the company. The increase in 'due from related party' suggests that related parties owed Golden Krust Caribbean Restaurant slightly more at the end of 2022 compared to the beginning of the year.
This detail is part of the broader financial picture, reflecting transactions between Golden Krust Caribbean Restaurant and its related entities. These related parties typically consist of real estate holdings under common ownership or management, as detailed elsewhere in the FDD. The amounts due from these parties primarily cover interest-bearing advances for working capital, lease payments, and allocations of operating expenses.
For a prospective franchisee, understanding these related-party transactions is crucial. It provides insight into the financial relationships and dependencies within the Golden Krust Caribbean Restaurant network. While the $322 increase is relatively small, it's important to consider it in the context of the larger amounts due between the company and its related entities, which can have implications for the company's overall financial health and stability.