Are the Gokhale Method's financial statements consolidated or individual?
Gokhale_Method Franchise · 2024 FDDAnswer from 2024 FDD Document
To the Board of Directors of Gokhale Method Institute, Inc. (a wholly owned subsidiary of Gokhale Method Enterprise, Inc.) Stanford, California
Opinion
We have audited the accompanying financial statements of Gokhale Method Institute, Inc. ("GMI" or the "Company"), which comprise the balance sheet as of December 31, 2023, and the related statements of income, changes in stockholder's equity, and cash flows for the year then ended, and the related notes to the financial statements.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Gokhale Method Institute, Inc. as of December 31, 2023, and the results of its operations and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 34)
What This Means (2024 FDD)
According to Gokhale Method's 2024 Franchise Disclosure Document, the financial statements provided are for Gokhale Method Institute, Inc., specifically. The independent auditor's report explicitly states that they have audited the financial statements of Gokhale Method Institute, Inc., which is identified as a wholly-owned subsidiary of Gokhale Method Enterprise, Inc.
This means the financial statements represent the financial position, operations, and cash flows of the Gokhale Method Institute, Inc. as a separate legal entity. The audit opinion confirms that these statements are presented fairly in accordance with accounting principles generally accepted in the United States of America.
For a prospective franchisee, this indicates that the financial performance represented is specific to the franchising entity, Gokhale Method Institute, Inc., and not a consolidated view of the entire Gokhale Method Enterprise, Inc. This distinction is important because the performance of the parent company or other related entities is not included, offering a clearer picture of the franchise system's financial standing. A potential franchisee might want to understand the relationship between the parent company and the subsidiary to assess any potential impact on the franchise system.