What were the repayments on note payable to a related party for Golden Krust Caribbean Restaurant in 2023?
Golden_Krust_Caribbean_Restaurant Franchise · 2024 FDDAnswer from 2024 FDD Document
nts due between the two companies of $75,031 and $4,657,186, respectively. Interest on these balances, charged to interest expense in the statements of operations totaled $7,630 and $44,615 for 2023 and 2022, respectively.
In November 2023, the Company agreed to pay Bakery $5,180,961 through a promissory note. The note has a term of 84 months and will mature on October 31, 2029. For the first 36 months, the Company will pay a monthly installment of $87,35
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 35)
What This Means (2024 FDD)
According to the 2024 Franchise Disclosure Document, Golden Krust Caribbean Restaurant entered into an agreement with Golden Krust Caribbean Bakery, Inc. in November 2023, to pay $5,180,961 through a promissory note. The note has an 84-month term, maturing on October 31, 2029.
For the first 36 months, Golden Krust Caribbean Restaurant is required to make monthly installments of $87,354, which includes 10.5% interest. After this initial period, the monthly installment will be adjusted based on the remaining balance and prevailing interest rates.
Since the note was agreed to in November 2023, Golden Krust Caribbean Restaurant would have made two payments in 2023 for a total of $174,708. This related-party transaction highlights the financial interdependencies within the Golden Krust Caribbean Restaurant system, specifically with its primary bakery supplier.