What does GMI do if the payment for a Gokhale Method class is collected by the teacher?

According to the 2024 Gokhale Method Franchise Disclosure Document, GMI's revenue recognition policy addresses scenarios where class payments are collected either by GME (Gokhale Method Enterprise, Inc.) or by the teacher. If a Gokhale Method teacher collects the payment for a class, GMI will record revenue for the net royalty due to them. This indicates that GMI accounts for its portion of the revenue (royalties) after the teacher has collected the class fees.

This approach has implications for franchisees as it clarifies how GMI accounts for revenue and royalties when the teacher directly handles payment collection. It suggests that franchisees (teachers) are responsible for collecting class fees, and GMI recognizes its royalty revenue based on the net amount due from those fees. This arrangement places the onus on the teacher to manage the collection process effectively.

For a prospective Gokhale Method franchisee, understanding this process is crucial for financial planning and reporting. Franchisees need to be aware of their responsibilities in collecting class fees and remitting the appropriate royalties to GMI. This policy ensures that GMI accurately records its revenue based on actual collections, regardless of who initially receives the payment. Franchisees should seek clarification on the exact procedures for royalty reporting and payment to ensure compliance with GMI's accounting practices.