Does Gokhale Method have any outstanding balances with related parties?
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 FDD, the company's accounts receivable primarily consist of net royalty receivables from franchises, teachers, or class fees collected by Gokhale Method Enterprise, Inc. (GME). The FDD states that Gokhale Method utilizes the allowance method for doubtful accounts, basing the allowance on management's review of past due accounts.
As of December 31, 2022, Gokhale Method's management believed that all receivables were collectible after year-end. This indicates that, at least for the period examined, Gokhale Method did not have any outstanding balances with related parties that were considered doubtful or uncollectible.
For a prospective franchisee, this suggests that Gokhale Method maintains a healthy relationship with its parent company, GME, regarding financial transactions and royalty collections. It also indicates that the company is diligent in assessing and managing its accounts receivable to ensure timely collection of dues.