What was the interest expense for Golden Krust Caribbean Restaurant in 2023?
Golden_Krust_Caribbean_Restaurant Franchise · 2024 FDDAnswer from 2024 FDD Document
57,643 |
GOLDEN KRUST FRANCHISING, INC. CONSOLIDATED STATEMENTS OF OPERATIONS YEARS ENDED DECEMBER 31, 2023 AND 2022
| 2023 | 2022 | |
|---|---|---|
| REVENUES | ||
| Royalties | $ 4,094,692 | $ 3,693,105 |
| Advertising Charges | 1,718,952 | 1,503,874 |
| Franchising Fees | 122,508 | 95,050 |
| Total Franchise Revenues | 5,936,152 | 5,292,029 |
| Company Owned Restaurant Sales | 2,631,341 | 2,896,104 |
| Cost of Sales | (1,071,371) | (1,226,078) |
| Restaurant Gross Profit | 1,559,970 | 1,670,026 |
| GROSS PROFIT | 7,496,122 | 6,962,055 |
| SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES | 7,038,995 | 5,856,268 |
| INCOME FROM OPERATIONS | 457,127 | 1,105,787 |
| OTHER INCOME (EXPENSE) | ||
| Interest Income | 188 | 8,756 |
| Interest Expense | (122,609) | (38,455) |
| Other Expense | (176,975) | (6,572) |
| Other Expense, Net | (299,396) | (36,271) |
| INCOME BEFORE RECOVERIES OF (PROVISION FOR) |
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 company's interest expense for 2023 was $122,609. This figure reflects the cost incurred by Golden Krust Caribbean Restaurant for borrowing money during that fiscal year. In comparison, the interest expense for 2022 was $38,455, indicating a significant increase in interest expenses from 2022 to 2023. This change could be due to increased borrowing, higher interest rates, or a combination of both.
Specifically, $7,630 of the 2023 interest expense is related to balances due between Golden Krust Franchising, Inc. and Golden Krust Caribbean Bakery, Inc. These balances accrue interest at a rate of 1% per annum. Additionally, in November 2023, Golden Krust Caribbean Restaurant agreed to pay Golden Krust Caribbean Bakery, Inc. $5,180,961 through a promissory note, which includes 10.5% interest for the first 36 months.
For a prospective franchisee, understanding the franchisor's interest expenses can provide insight into the financial health and debt management practices of Golden Krust Caribbean Restaurant. A substantial increase in interest expenses, as seen from 2022 to 2023, may warrant further investigation to assess the company's financial stability and its ability to support its franchisees. It is important to note that these figures are from the consolidated financial statements, which include the company and its wholly-owned subsidiaries.