Is the proportion of required purchases high or low for a Gokhale Method franchisee?
Gokhale_Method Franchise · 2024 FDDAnswer from 2024 FDD Document
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We will derive revenue from your purchase of required items. We estimate that the total amount that you will pay us for required purchases, including continuing education fees, will be between $2,081 and $3,332 during your first year of operation.
During our fiscal year ended December 31, 2023, our total revenue was $81,612. Total sales of required items was $28,368, or 35 percent of our total revenue. The total estimated proportion of all required purchases and leases in relation to all purchases and leases you will make in establishing the business is less than 25%. The total estimated proportion of all required purchases and leases in relation to all purchases and leases you will make in operating the business during your first year of operation is less t
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 15–17)
What This Means (2024 FDD)
According to Gokhale Method's 2024 Franchise Disclosure Document, the proportion of required purchases is relatively low. The FDD indicates that the total estimated proportion of all required purchases and leases in relation to all purchases and leases a franchisee will make in establishing the business is less than 25%. Similarly, the total estimated proportion of required purchases and leases in relation to all purchases and leases during the first year of operating the business is also less than 25%. This suggests that franchisees have considerable flexibility in sourcing many of the items needed to run their Gokhale Method business.
Specifically, Gokhale Method franchisees are required to purchase certain proprietary items from the franchisor, such as the Gokhale® Roller, Gokhale Pain-Free™ Chair, Stretchsit® Cushions, Gokhale® Wedges, Gokhale® Head Cushions, copies of the book '8 Steps to a Pain-Free Back', and possibly shirts or uniforms. However, franchisees can purchase other required equipment and supplies from any source, provided they meet Gokhale Method's specifications. This includes items like an Apple MacBook or equivalent PC, an iPhone, iPad, or iPod Touch, a digital projector, a projector screen, exercise straps, yoga mats, pillows, and folding chairs.
For a prospective franchisee, this means that while there are some mandatory purchases from Gokhale Method, a significant portion of the necessary equipment and supplies can be sourced independently, potentially allowing for cost savings. It is important for potential franchisees to carefully review the specifications provided by Gokhale Method to ensure that any independently sourced items meet the required standards. Additionally, franchisees should be aware that Gokhale Method reserves the right to require additional equipment or supplies from them in the future, which could impact the proportion of required purchases.