How does the Gokhale Method company handle the expenses related to advertising?
Gokhale_Method Franchise · 2024 FDDAnswer from 2024 FDD Document
Advertising
The Company expenses its costs for advertising when incurred. Such costs are included in general and administrative expenses. For the year ended December 31, 2023, advertising expense was $3,943.
12. ADVERTISING AND PROMOTION
Recognizing the value of advertising, marketing, and promotion, and the importance of the standardization of advertising, marketing, and promotion programs to the furtherance of the goodwill and public image of the System, the parties agree as follows:
- 12.1. Local Marketing, Advertising, and Promotion Expenditure. You shall follow the guidelines in the Teachers' Manual and Policy Statements regarding marketing, advertising and promotion and upon our request, you shall provide satisfactory evidence of all Local Marketing, Advertising and Promotion Expenditures in such manner as we shall direct. Such guidelines may include, but are not limited to offering free promotional classes. You shall bear the cost of all such activities. You also agree to pay us for any advertising materials that we create for you and at your request, including the costs of creating such materials and reproducing them.
- 12.2. Advertising Materials. All advertising and promotion by you shall be in such media and of such type and format as we may approve, shall be conducted in a dignified manner and shall conform to such standards and requirements as we may specify. You shall not use any advertising or promotional plans or materials relating to the Gokhale Method unless and until you have received written approval from us. You acknowledge and agree that we may require, in our sole business judgment, that in all advertising relating to the Gokhale Method that you use must designate only our designated Website, our designated email address and your phone number for contacting you.
Source: Item 22 — CONTRACTS (FDD page 34)
What This Means (2024 FDD)
According to the 2024 Gokhale Method Franchise Disclosure Document, the company expenses its advertising costs when they are incurred. These costs are then included in general and administrative expenses. For the year ending December 31, 2023, Gokhale Method's advertising expenses totaled $3,943. In comparison, advertising expenses were $4,917 for the year ending December 31, 2021, and $2,940 for the year ending December 31, 2020.
In terms of local marketing, advertising, and promotion, franchisees are required to follow the guidelines set forth in the Teachers' Manual and Policy Statements. Upon request from Gokhale Method, franchisees must provide satisfactory evidence of all local marketing, advertising, and promotion expenditures. These guidelines may include offering free promotional classes, and the franchisee is responsible for bearing the costs of all such activities. Additionally, franchisees agree to pay Gokhale Method for any advertising materials that the company creates at the franchisee's request, including the costs of creating and reproducing these materials.
All advertising and promotion conducted by franchisees must be in a format approved by Gokhale Method and must adhere to the standards and requirements specified by the company. Franchisees are prohibited from using any advertising or promotional plans or materials related to the Gokhale Method without prior written approval from the company. Gokhale Method may also require that all advertising designate only their designated website, email address, and the franchisee's phone number for contact information. This ensures that all advertising aligns with the company's brand and image, maintaining consistency across all franchise locations.