What was the net loss for Golden Krust Caribbean Restaurant during 2021?
Golden_Krust_Caribbean_Restaurant Franchise · 2024 FDDAnswer from 2024 FDD Document
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CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
| Year Ended December 31, 2022 | 2021 | |
|---|---|---|
| REVENUES | ||
| Royalties | $ 3,566,598 $ | 3,041,453 |
| Advertising Charges | 1,503,874 | 982,160 |
| Franchising Fees | 95,050 | 99,592 |
| Total Franchise Revenues | 5,165,522 | 4,123,205 |
| Company owned restaurant sales | 2,896,104 | 2,976,981 |
| Cost of sales | (1,226,078) | (1,226,592) |
| Restaurant Gross Profit | 1,670,026 | 1,750,389 |
| Total Gross Profit | 6,835,548 | 5,873,594 |
| SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES | 5,729,761 | 7,611,396 |
| INCOME (LOSS) FROM OPERATIONS | 1,105,787 | (1,737,802) |
| OTHER INCOME (EXPENSE): | ||
| Interest income | 8,756 | 4,634 |
| Employee retention credit | - | 580,958 |
| Related party loan forgiveness | - | 567,961 |
| Interest expense | (51,235) | (40,408) |
| Other income (expense) | 6,208 | (12,623) |
| Total Other (Expense) Income, net | (36,271) | 1,100,522 |
| INCOME (LOSS) BEFORE PROVISION FOR | ||
| IN |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 35)
What This Means (2024 FDD)
According to the 2024 Franchise Disclosure Document, Golden Krust Caribbean Restaurant had a net loss of $659,030 in 2021. This figure is derived from the consolidated statements of operations for the years ending December 31, 2022, and 2021. The document also indicates a comprehensive loss of $664,096 for the same period.
For a prospective franchisee, this net loss indicates that Golden Krust Caribbean Restaurant's expenses exceeded its revenues in 2021. However, in 2022, the company reported a net income of $1,141,393, suggesting a significant turnaround in financial performance. It's important to investigate the factors contributing to both the loss in 2021 and the subsequent profit in 2022 to understand the stability and growth potential of the franchise.
Additional factors influenced the net loss. Other income, net of expenses, totaled $1,100,522 in 2021, which includes employee retention credit of $580,958 and related party loan forgiveness of $567,961. Selling, general, and administrative expenses were $7,611,396. Franchisees should consider these elements when assessing the overall financial health and sustainability of a Golden Krust Caribbean Restaurant franchise.