Does the Gokhale Method franchise agreement specify how the royalty fee is calculated?
Gokhale_Method Franchise · 2024 FDDAnswer from 2024 FDD Document
- 5.2. Student Payments. All payments collected from your students for teaching the System, including but not limited to continuing training or programs which may be offered from time to time will be paid by the student directly to us through our payment system ("GMI-Pay Students") unless such fees are paid by the student to you in cash or by paper check or a credit card system in your facility ("Direct-Pay Students").
- 5.3. Royalty Fee Direct Pay. For Direct-Pay Students you agree to pay us a non-refundable royalty ("Royalty") during the Term in accordance with our Royalty Schedule in effect as of the time of payment. The Royalty 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.
- 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
Source: Item 22 — CONTRACTS (FDD page 34)
What This Means (2024 FDD)
According to Gokhale Method's 2024 Franchise Disclosure Document, the royalty fee calculation depends on how the student pays. If a student pays Gokhale Method directly through their payment system (GMI-Pay Students), Gokhale Method will deduct the royalty, billing fee, and any other amounts owed by the franchisee from the student's payment. The balance is then remitted to the franchisee according to Gokhale Method's payment schedule. The specific schedule of fees and royalties is detailed in Exhibit A of the Franchise Agreement, which can be changed with 30 days' notice.
For students who pay the franchisee directly via cash, check, or credit card (Direct-Pay Students), the franchisee is responsible for paying Gokhale Method a royalty according to the Royalty Schedule in effect at the time of payment. This Royalty Schedule is also included in Exhibit A of the Franchise Agreement and is subject to change with thirty days' notice.
In both scenarios, the exact royalty calculation is determined by the Royalty Schedule outlined in Exhibit A of the Franchise Agreement. Prospective franchisees should carefully review Exhibit A to understand the specific percentages or amounts that will be due as royalties based on student payments. They should also be aware that these fees and royalties are subject to change at Gokhale Method's discretion, with a 30-day notice period.