What was the management's belief regarding the collectability of receivables for the Gokhale Method after year end 2023?
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)
The 2024 Gokhale Method Franchise Disclosure Document does not include information regarding management's belief about the collectability of receivables after year end 2023. However, the FDD does detail the management's belief regarding collectability of receivables for the years 2021 and 2022.
Specifically, the FDD states that Gokhale Method utilizes the allowance method of accounting for doubtful accounts, basing the allowance on management's review of past due accounts. As of December 31, 2022, management believed that all receivables were collectable after year end. Similarly, the FDD states that as of December 31, 2021 and 2020, management believed that all receivables were collectable after year end.
For a prospective franchisee, this indicates that Gokhale Method has historically been confident in its ability to collect outstanding payments. However, the absence of this information for 2023 means a potential franchisee should inquire directly with Gokhale Method about their current assessment of receivable collectability and the factors influencing this assessment.