How does the Gokhale Method recognize royalty revenue?
Gokhale_Method Franchise · 2024 FDDAnswer from 2024 FDD Document
Royalty revenue pertains to a pre-determined amount or percentage for each course taught based on the type of course taught and the number of participants. For royalties, revenue is recognized when students participate in the class. For many of these classes, the payment is processed or collected by GME or the teacher. If the payment is collected by GME, the royalties due to GMI on these classes are periodically remitted to GMI by GME. If the payment is collected by the teacher, GMI will record revenue for the net royalty due.
Source: Item 22 — CONTRACTS (FDD page 34)
What This Means (2024 FDD)
According to the 2024 Gokhale Method Franchise Disclosure Document, royalty revenue is tied to student participation in classes. Gokhale Method recognizes royalty revenue when students participate in the classes. The royalty is a pre-determined amount or percentage for each course taught, and this amount is based on the type of course and the number of participants.
In many instances, payments for these classes are either processed or collected by Gokhale Method Enterprises, Inc. (GME) or by the teacher themselves. When GME collects the payment, they periodically remit the royalties due to Gokhale Method Institute (GMI). If the payment is collected by the teacher, GMI records revenue for the net royalty due.
This means that as a Gokhale Method franchisee, your royalty obligations are directly linked to class attendance. The revenue recognition policy ensures that Gokhale Method accounts for royalties in the period when the classes are actually conducted and the service is provided to the students. Franchisees should maintain accurate records of class attendance and payments to ensure proper royalty reporting, whether payments are collected directly or remitted through GME.