What was the total amount of Accounts Payable for Golden Krust Caribbean Restaurant in 2023?
Golden_Krust_Caribbean_Restaurant Franchise · 2024 FDDAnswer from 2024 FDD Document
-----------| | Federal Income Tax Expense | $ (56,475) | $ - | | State and Local Tax Recovery (Expense) | (19,107) | 71,877 | | Recovery of (Provision for) Income Taxes | $ (75,582) | $ 71,877 |
NOTE 7 RELATED PARTIES
The Company, through common ownership, has a relationship with Golden Krust Caribbean Bakery, Inc. (Bakery), which provides a significant amount of the food and beverage products that are sold in the Company's restaurants, as well as in the franchisees of the Company. Additionally, general and administrative functions and resources are shared between the two companies. These general and administrative expenses, charged to selling, general, and administrative expenses on the consolidated statements of operations, were $142,186 and $145,391 during 2023 and 2022, respectively.
During 2023 and 2022, Bakery sales to the Company-owned restaurants aggregated approximately $605,000 and $922,000, respectively.
The Company also entered into an agreement with Bakery, whereby any related party receivables or payables will accrue interest at a rate of 1% per annum on any balances between the two companies. At December 31, 2023 and 2022, there were amounts 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)
Based on the 2024 Franchise Disclosure Document, the provided excerpts do not contain a specific figure for the total accounts payable for Golden Krust Caribbean Restaurant as of December 31, 2023. However, the document does discuss payables to related parties, specifically Golden Krust Caribbean Bakery, Inc.
The FDD indicates that Golden Krust Caribbean Restaurant had an agreement with the Bakery where any related party receivables or payables would accrue interest at a rate of 1% per annum. As of December 31, 2023, the amount due between the two companies was $75,031. Additionally, in November 2023, the Company agreed to pay the Bakery $5,180,961 through a promissory note, which includes interest.
For a prospective franchisee, it's important to note the related-party transactions and how they might affect the financial health of the company. Understanding the total accounts payable would provide a more comprehensive view of the company's financial obligations. Therefore, a potential franchisee should inquire about the total accounts payable, including those to both related and unrelated parties, to gain a clearer picture of the company's overall liabilities and financial stability.