What was the initial non-refundable franchise fee for the Gokhale Method franchise agreement after the 2016 update?
Gokhale_Method Franchise · 2024 FDDAnswer from 2024 FDD Document
an invoice for the net royalty.
Our franchise agreements generally provide for an initial non-refundable franchise fee of $3,500 and $4,000 per franchise for three-years term until 2016 and was then updated to five-years terms respectively. We classify this as deferred revenue in our balance sheets and rec
Source: Item 22 — CONTRACTS (FDD page 34)
What This Means (2024 FDD)
According to the 2024 Gokhale Method Franchise Disclosure Document, the initial non-refundable franchise fee after the 2016 update is $4,000. This fee is payable upon the execution of the Franchise Agreement. Once paid, the fee is considered fully earned by Gokhale Method and is non-refundable to the franchisee.
This initial franchise fee grants the franchisee the right to operate a Gokhale Method franchise for a term of five years, which was updated from a three-year term in 2016. Gokhale Method classifies this fee as deferred revenue on their balance sheet and recognizes it over the duration of the franchise term. This accounting practice means that Gokhale Method doesn't recognize the entire fee as income immediately but spreads it out over the five-year franchise term.
Prospective franchisees should be aware that this $4,000 fee is non-refundable, meaning that if the franchisee decides not to proceed with opening the franchise after signing the agreement and paying the fee, they will not receive a refund. This is a standard practice in franchising, as the fee covers Gokhale Method's initial costs in setting up the franchise and providing initial training and support. Franchisees should carefully consider their decision before signing the agreement and paying this fee.