What was the total amount Owed to Related Parties by Golden Krust Caribbean Restaurant in 2022?
Golden_Krust_Caribbean_Restaurant Franchise · 2024 FDDAnswer from 2024 FDD Document
| $ 3,557,643 |
GOLDEN KRUST FRANCHISING, INC. CONSOLIDATED BALANCE SHEETS (CONTINUED) DECEMBER 31, 2023 AND 2022
| 2023 | 2022 | |
|---|---|---|
| LIABILITIES AND SHAREHOLDERS' DEFICIT | ||
| CURRENT LIABILITIES | ||
| Accounts Payable | $ 635,580 | $ 880,096 |
| Current Lease Liability - Operating | 79,464 | 113,319 |
| Accrued Expenses | 430,622 | 450,358 |
| Note Payable - Related Party, Current Portion | 538,544 | - |
| Other Current Liabilities | 9,328 | 22,582 |
| Deferred Franchise Fees, Current Portion | 124,000 | 99,675 |
| Total Current Liabilities | 1,817,538 | 1,566,030 |
| LONG-TERM LIABILITIES | ||
| Long-Term Lease Liability - Operating, Less Current Maturities | 356,336 | 510,113 |
| Deferred Franchise Fees, Less Current Portion | 796,513 | 857,346 |
| Amount Owed to Related Parties | 126,770 | 5,725,747 |
| Note Payable - Related Party, Net of Current Portion | 4,558,007 | - |
| Total Long-Term Liabilities | 5,837,626 | 7,093,206 |
| COMMITMENTS AND CONTINGENCIES | ||
| SHAREHOLDERS' DEFICIT | ||
| Common Stock | 170,100 | 170,100 |
| Accumulated Deficit | (5,189,544) |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 35)
What This Means (2024 FDD)
According to Golden Krust Caribbean Restaurant's 2024 Franchise Disclosure Document, the amount owed to related parties in 2022 was $5,725,747. This figure is listed under long-term liabilities in the consolidated balance sheet as of December 31, 2022. This indicates the financial obligations Golden Krust Caribbean Restaurant had with entities related to them through common ownership or management.
For a prospective franchisee, this figure is important for assessing the financial health and stability of Golden Krust Caribbean Restaurant. A high amount owed to related parties could indicate reliance on these parties for financing or operational support. It is important to note that the amounts owed to related parties are classified as long-term liabilities, suggesting that these obligations are not expected to be settled within the next year.
Understanding the nature of these related party transactions and the terms of repayment is crucial. The FDD also mentions that the company 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. Reviewing the complete financial statements and notes, along with consulting with a financial advisor, can provide a clearer picture of the implications of these liabilities for the franchisee and the overall financial risk involved.