What was the deferred revenue for Gokhale Method in 2021?
Gokhale_Method Franchise · 2024 FDDAnswer from 2024 FDD Document
22
| 2021 | 2020 | |||
|---|---|---|---|---|
| ASSETS | ||||
| CURRENT ASSETS | ||||
| Cash and cash equivalents | S | 120,520 | 5 | 112,072 |
| Accounts receivable, net | 4,941 | 3,344 | ||
| Other current assets | - | - | 428 | |
| TOTAL ASSETS | S | 125,461 | S | 115,844 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||
| CURRENT LIABILITIES | ||||
| Accounts payable | 5 | 8,652 | $ | 6,731 |
| Deferred revenue | 4,825 | 13,248 | ||
| Payable to Teachers | 1,365 | |||
| Other current liabilities | - | 138 | _ | 138 |
| TOTAL LIABILITIES | _ | 14,980 | 1 | 20,117 |
| STOCKHOLDERS' EQUITY | ||||
| Common stock (1,000 voting shares anthorized, 500 shares issued and | 5 | 5 | ||
| outstanding, $0.01 par value) | ||||
| Common stock (1,000 non-voting shares authorized, no shares issued | ||||
| and outstanding, $0.01 par value) |
Source: Item 22 — CONTRACTS (FDD page 34)
What This Means (2024 FDD)
According to Gokhale Method's 2024 Franchise Disclosure Document, the deferred revenue for 2021 was $4,825. The document also shows the deferred revenue for 2020 was $13,248.
Deferred revenue represents payments Gokhale Method has received for services or products that have not yet been delivered or earned. In the case of Gokhale Method, this primarily includes initial franchise fees and renewal fees. These fees are recognized as revenue over the term of the franchise agreement.
A prospective franchisee should understand how deferred revenue impacts Gokhale Method's financial statements. It is a liability on the balance sheet because Gokhale Method owes the franchisee the services or products related to those payments. The decrease in deferred revenue from 2020 to 2021 could be due to several factors, such as fewer new franchises being sold or a change in the timing of revenue recognition.