What was the Total Liabilities and Shareholders' Deficit for Golden Krust Caribbean Restaurant in 2023?
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 company's total liabilities and shareholders' deficit was $2,635,720 in 2023. This figure represents the sum of all the company's obligations to creditors and the net worth attributable to its shareholders, which can be a key indicator of the company's financial health. In comparison, the total liabilities and shareholders' deficit in 2022 was $3,557,643.
A prospective franchisee should understand the components that make up these figures. Liabilities include both current liabilities, such as accounts payable, accrued expenses, and the current portion of notes payable, and long-term liabilities, such as long-term lease liabilities, deferred franchise fees, and amounts owed to related parties. The shareholders' deficit includes common stock and accumulated deficit, reflecting the cumulative losses of the company over time.
Changes in these figures from year to year can indicate shifts in the company's financial strategy or performance. For example, the increase in the 'Note Payable - Related Party' from $0 in 2022 to $4,558,007 in 2023 under long-term liabilities suggests a significant borrowing from related parties. A potential franchisee should investigate the reasons behind such changes and their potential impact on the company's future financial stability. Understanding these details is crucial for assessing the financial risk and stability of investing in a Golden Krust Caribbean Restaurant franchise.