How long is the term covered by the initial franchise fee for the Gokhale Method?
Gokhale_Method Franchise · 2024 FDDAnswer from 2024 FDD Document
invoice for the net royalty.
Our franchise agreements generally provide for an initial non-refundable franchise fee $4,000 per franchise for five-years term. We classify this as deferred revenue in our balance sheet and recog
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 of $4,000 covers a five-year term. This means that upon paying the initial franchise fee, a franchisee is granted the rights to operate a Gokhale Method franchise for five years.
The FDD also states that Gokhale Method classifies the initial franchise fee as deferred revenue on its balance sheet. This means that the revenue is recognized gradually over the five-year franchise term, rather than all at once when the fee is collected. This accounting practice aligns the revenue recognition with the period during which the franchisee is utilizing the Gokhale Method system and brand.
After the initial five-year term, the franchisee may have the option to renew the franchise agreement, which may involve paying a renewal fee. Additionally, franchisees are required to pay continuing education fees, including annual meeting fees, online university membership fees, and teacher teleseminar fees, which are separate from the initial franchise fee and contribute to the ongoing operational costs of the franchise.