What happens if the payment for a Gokhale Method class is collected by the teacher?
Gokhale_Method Franchise · 2024 FDDAnswer from 2024 FDD Document
Accounts receivable is primarily comprised of net royalty receivables from franchise, teachers, or class fees collected by GME.
The Company utilizes the allowance method of accounting for doubtful accounts. The allowance is based on management's review of all past due accounts. As of December 31, 2022, management believes that all receivables are collectable after year end.
Source: Item 22 — CONTRACTS (FDD page 34)
What This Means (2024 FDD)
According to the 2024 Gokhale Method Franchise Disclosure Document, accounts receivable is primarily comprised of net royalties receivables from franchise, teachers, or class fees collected by GME (Gokhale Method Enterprise, Inc.).
This means that when a Gokhale Method teacher collects fees for classes, those fees are considered accounts receivable. These receivables are used to calculate net royalties due to GME. The FDD states that GME was the company that incorporated Gokhale Method Institute, Inc. (GMI) in 2011.
The document also states that the company utilizes the allowance method of accounting for doubtful accounts, which is based on management's review of all past due accounts. As of December 31, 2022, management believed that all receivables were collectable after year end. This indicates that Gokhale Method closely monitors the collection of fees and royalties and has confidence in its ability to collect outstanding amounts.