How much did Golden Krust Caribbean Restaurant spend on advertising in 2022?
Golden_Krust_Caribbean_Restaurant Franchise · 2024 FDDAnswer from 2024 FDD Document
The Company maintains an advertising fund, which is accounted for separately, as described in the Company's Franchise Disclosure Document ("FDD"). The Company's franchisee's make monthly contributions to the advertising fund based on a percentage of their respective sales. These funds are segregated in order to pay for franchise related advertising and cannot be used to defray general operating expenses of the Company, except as otherwise described in the FDD. Any unspent advertising revenues are included in accrued expenses on the balance sheets. As of December 31, 2022 and 2021, there were no accrued advertising expenses, as the Company spent more in advertising than it recognized as advertising revenue from its franchisees.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 35)
What This Means (2024 FDD)
According to the 2024 Franchise Disclosure Document, Golden Krust Caribbean Restaurant franchisees contribute monthly to an advertising fund, with the amount based on a percentage of their sales. These funds are specifically for franchise-related advertising and cannot be used for the company's general operating expenses, unless otherwise stated in the FDD. The funds are kept separate. As of December 31, 2022, there were no accrued advertising expenses, because Golden Krust Caribbean Restaurant spent more on advertising than it received in advertising revenue from its franchisees.
This indicates that Golden Krust Caribbean Restaurant actively invests in advertising and is willing to spend more than it collects from franchisees for this purpose. For a prospective franchisee, this could mean that the brand is committed to marketing and promoting the franchise system, which could help drive business to their location.
However, the 2024 FDD does not specify the exact dollar amount Golden Krust Caribbean Restaurant spent on advertising in 2022. A prospective franchisee should ask the franchisor for the specific amount spent on advertising in 2022 to better understand the company's investment in marketing and how those funds were allocated.