What was the increase/decrease in due to related parties for Golden Krust Caribbean Restaurant in 2023?
Golden_Krust_Caribbean_Restaurant Franchise · 2024 FDDAnswer from 2024 FDD Document
| 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 |
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 increase (decrease) in due to related parties decreased by $5,598,977 in 2023, compared to an increase of $1,604,275 in 2022. This represents a significant shift in the company's financial transactions with related parties.
This substantial decrease could be due to a variety of factors, such as changes in loan activity, payments made to related parties, or a restructuring of financial relationships. For a prospective franchisee, this indicates a potentially volatile aspect of the company's finances that warrants further investigation. Understanding the nature of these related-party transactions and the reasons behind the large decrease is crucial for assessing the financial stability and transparency of Golden Krust Caribbean Restaurant.
It is important for potential franchisees to seek clarification from Golden Krust Caribbean Restaurant regarding these fluctuations. Understanding the reasons behind these changes can provide valuable insights into the company's financial management and its relationships with related entities. This due diligence will help franchisees make informed decisions about their investment and partnership with Golden Krust Caribbean Restaurant.