What was the deferred revenue for Gokhale Method in 2023?
Gokhale_Method Franchise · 2024 FDDAnswer from 2024 FDD Document
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| 2023 | |
|---|---|
| ASSETS | |
| Cash and cash equivalents Accounts receivable, net | $ 154,584 15,944 |
| TOTAL ASSETS | $ 170,528 |
| LIABILITIES AND STOCKHOLDER'S EQUITY | |
| LIABILITIES Accounts payable and other current liabilities Deferred revenue | $ 8,491 48,956 |
| Total liabilities | 57,447 |
| STOCKHOLDER'S EQUITY Common stock (1,000 voting shares authorized, 500 shares issued and outstanding, $0.01 par value) | 5 |
| Common stock (1,000 non-voting shares authorized, no shares issued and outstanding, $0.01 par value) | - |
| Additional paid in capital Retained earnings | 100,657 12,419 |
| Total stockholder's equity | 113,081 |
| TOTAL LIABILITIES & STOCKHOLDER'S EQ |
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 2023 was $48,956. This figure represents the amount of revenue that Gokhale Method has received but not yet earned as of December 31, 2023. This deferred revenue primarily comes from initial franchise fees and renewal fees, which are recognized over the franchise term.
Deferred revenue is a common accounting practice in franchising, where initial fees are often recognized over the life of the franchise agreement rather than immediately upon receipt. This approach aligns revenue recognition with the period during which Gokhale Method provides ongoing support and benefits to its franchisees.
Additionally, the FDD states that the changes in operating assets and liabilities related to deferred revenue was $40,870 in 2023. This indicates the increase in deferred revenue during the year, reflecting new franchise sales and renewals. This increase contributes to the overall cash flow from operating activities, which was reported as $34,443 for the same period. These figures provide insight into the financial health and revenue recognition practices of Gokhale Method.