What was the net accounts receivable for Gokhale Method in 2020?
Gokhale_Method Franchise · 2024 FDDAnswer from 2024 FDD Document
Accounts receivable is primarily comprised of net royalties' 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, 2021 and 2020, management believes that all receivables are collectable after year end.
Source: Item 22 — CONTRACTS (FDD page 34)
What This Means (2024 FDD)
According to Gokhale Method's 2024 Franchise Disclosure Document, 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, 2021 and 2020, management believed that all receivables were collectable after year end.
This indicates that Gokhale Method did not have any uncollectible accounts receivable that required an allowance for doubtful accounts in 2020 or 2021. In other words, Gokhale Method believed that it would collect all of the money it was owed.
For a prospective franchisee, this suggests that Gokhale Method has been effective in collecting its receivables, which are primarily net royalties from franchises, teachers, or class fees collected by GME. This may indicate a healthy financial relationship between Gokhale Method and its franchisees and a lower risk of non-payment for services rendered.