Is the royalty fee for Direct-Pay Students in the Gokhale Method franchise refundable?
Gokhale_Method Franchise · 2024 FDDAnswer from 2024 FDD Document
Students").
- 5.3. Royalty Fee Direct Pay. For Direct-Pay Students you agree to pay us a non-refundable royalty ("Royalty") during the Term in accordance with our Royalty Schedule in effect as of the time of payment. The Royalty Schedule in effect as of the signing of this Agreement is included in the annexed Exhibit A and is subject to change from time to time in our reasonable discretion upon thirty (30) days' notice.
- 5.4. Royalty Fee GMI Pay. For GMI-Pay Students we will collect our royalty, Billing Fee and any other amounts that you owe us from the amount tendered by the student to us. After such deductions, we will
remit the balance to you in accordance with our payment schedule.
Source: Item 22 — CONTRACTS (FDD page 34)
What This Means (2024 FDD)
According to the 2024 Gokhale Method Franchise Disclosure Document, the royalty fees for Direct-Pay Students are non-refundable. Direct-Pay Students are those who pay the franchisee directly in cash, by paper check, or via a credit card system at the franchisee's facility.
This means that once a Gokhale Method franchisee pays the royalty fee for students who directly pay them, they cannot get that money back, regardless of the circumstances. The specific amount and schedule for these royalties are detailed in Exhibit A of the Franchise Agreement, which may be updated by Gokhale Method with 30 days' notice.
This non-refundable policy is a standard practice in franchising, as royalty fees are typically considered compensation for the ongoing use of the franchisor's system, brand, and support. Prospective franchisees should carefully review the royalty schedule and ensure they understand the payment terms before signing the agreement, as these fees represent a continuous financial obligation throughout the term of the franchise agreement.