What portion of the Gokhale Method management fees is included in selling expense?
Gokhale_Method Franchise · 2024 FDDAnswer from 2024 FDD Document
c | Management fee | $ 26,100 |
A portion of management fees is included in selling expense for $2,451 and the remaining portion of the management fees is included in the general and administrative expense caption of the Statement of Operations.
Outstanding balances with related parties are as follows:
| Dece | mber 31, | |||
|---|---|---|---|---|
| Accounts | 2 | 2022 | ||
| Gokhale Method Enterprise, Inc. |
Source: Item 22 — CONTRACTS (FDD page 34)
What This Means (2024 FDD)
According to Gokhale Method's 2024 Franchise Disclosure Document, a portion of the management fees is categorized as selling expense. For one instance, this amount is specified as $2,451. The remaining portion of the management fees is classified under the general and administrative expense section within the Statement of Operations.
In another instance, a different amount is specified. A portion of the management fees is included in selling expense for $3,943, with the remainder being allocated to the general and administrative expense section of the Statement of Income.
This accounting practice means that Gokhale Method divides its management fees between selling expenses and general administrative expenses. Prospective franchisees should understand how these allocations are made, as they can affect the reported profitability and expense ratios of the company. It is important to note that these figures represent a snapshot in time and may vary in future financial statements.