How much was due from related parties to Golden Krust Caribbean Restaurant in 2022?
Golden_Krust_Caribbean_Restaurant Franchise · 2024 FDDAnswer from 2024 FDD Document
At December 31, 2022 and 2021 there were amounts due between the two companies of $4,657,186 and $3,691,201, respectively. Interest on these balances, charged to interest expense in the statements of operations totaled $44,614 and $40,375 for 2022 and 2021, respectively.
The Company also has balances due from (to) related parties, through common ownership/management. These related parties consist mainly of real estate holdings that are not consolidated in these financial statements. A total of $913,125 and $274,191 are due to, and $77,718 and $78,040 are due from these related parties as of December 31, 2022 and 2021, respectively. These amounts primarily consist of interest-bearing advances for working capital, lease pay
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 35)
What This Means (2024 FDD)
According to Golden Krust Caribbean Restaurant's 2024 Franchise Disclosure Document, at December 31, 2022, $913,125 was due to related parties, while $77,718 was due from these related parties. These related parties primarily consist of real estate holdings not consolidated in the financial statements. These balances mainly consist of interest-bearing advances for working capital, lease payments, and the allocation of operating expenses.
Since there are no scheduled repayment requirements, both the receivable and payable balances are classified as noncurrent assets and long-term liabilities on the balance sheets. This means that Golden Krust Caribbean Restaurant does not have a fixed schedule to pay back these amounts. Also, no interest is charged on these liabilities.
For a prospective franchisee, this indicates that Golden Krust Caribbean Restaurant engages in transactions with related entities, which could impact the company's financial position. It's important to note that these transactions are disclosed in the financial statements, providing transparency into the company's dealings with related parties. A potential franchisee should seek clarification from the franchisor regarding the nature and terms of these related party transactions to fully understand their implications.