Besides royalties, what other amounts are deducted from GMI-Pay Student payments for a Gokhale Method franchise?
Gokhale_Method Franchise · 2024 FDDAnswer from 2024 FDD Document
- 5.4. Royalty Fee GMI Pay. For GMI-Pay Students we will collect our royalty, Billing Fee and any other amounts that you owe us from the amount tendered by the student to us. After such deductions, we will
remit the balance to you in accordance with our payment schedule. The schedule of fees and royalties in effect as of the signing of this Agreement is included in the annexed Exhibit A and is subject to change from time to time in our reasonable discretion upon thirty (30) days' notice.
- 5.5. Billing Fees. For GMI-Pay Students you will pay us a Billing Fee in accordance with our Billing Fee Schedule in effect as of the time of payment.
The Billing Fee Schedule in effect as of the signing of this Agreement is included in the annexed Exhibit A and is subject to change from time to time in our reasonable discretion upon thirty (30) days' notice.
Source: Item 22 — CONTRACTS (FDD page 34)
What This Means (2024 FDD)
According to Gokhale Method's 2024 Franchise Disclosure Document, in addition to royalties, a Billing Fee and any other amounts owed to Gokhale Method are deducted from GMI-Pay student payments. After these deductions, the balance is remitted to the franchisee according to the payment schedule. The specific Billing Fee schedule in effect when the franchise agreement is signed is included as Exhibit A and is subject to change with thirty days' notice.
This means that if a Gokhale Method franchisee uses the GMI-Pay system for student payments, the franchisor will automatically deduct royalties, billing fees, and any other outstanding debts the franchisee owes to them before sending the remaining amount to the franchisee. It is important for prospective franchisees to carefully review Exhibit A of the Franchise Agreement to understand the current fee structure and how it might change over time.
Franchisees should be aware that these deductions can impact their cash flow, so understanding the amounts and payment schedules is crucial for financial planning. It is also important to clarify what constitutes 'any other amounts that you owe us' to avoid unexpected deductions. Prospective franchisees should inquire about typical billing fee amounts and how often these fees are adjusted to accurately forecast expenses.