What was the total balance for Golden Krust Caribbean Restaurant as of December 31, 2023?
Golden_Krust_Caribbean_Restaurant Franchise · 2024 FDDAnswer from 2024 FDD Document
ted 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)
According to Golden Krust Caribbean Restaurant's 2024 Franchise Disclosure Document, the company had amounts due between the company and Golden Krust Caribbean Bakery, Inc. of $75,031 as of December 31, 2023. These amounts are related to an agreement where any related party receivables or payables will accrue interest at a rate of 1% per annum on any balances between the two companies.
Additionally, in November 2023, Golden Krust Caribbean Restaurant 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 $87,354, which includes 10.5% interest. After 36 months, the monthly installment will be adjusted based on the remaining balance of the note based on prevailing rates.
As a prospective franchisee, it's important to understand the financial relationships Golden Krust Caribbean Restaurant has with its related parties, as these transactions could impact the financial stability and operations of the franchise system. Reviewing the full financial statements and notes, including the details of the promissory note and related party transactions, is crucial for assessing the overall financial health of the company.