What were the total franchise fees recognized by the Gokhale Method as of December 31, 2020?
Gokhale_Method Franchise · 2024 FDDAnswer from 2024 FDD Document
regated revenue are as follows:
| December 31, 2021 | December 31, 2020 | |
|---|---|---|
| Revenue recognition | ||
| Franchise fees | $ 25,998 | $ 25,576 |
| Royalty | 28,918 | 42,599 |
| Other | 13,480 | 7.670 |
Source: Item 22 — CONTRACTS (FDD page 34)
What This Means (2024 FDD)
According to the 2024 Gokhale Method Franchise Disclosure Document, the total franchise fees recognized by Gokhale Method as of December 31, 2020, were $25,576. This figure represents the amount of initial franchise fees that Gokhale Method recognized as revenue during that year.
It is important to note that Gokhale Method recognizes initial franchise fees as deferred revenue on their balance sheet. This means that the initial franchise fee, which is $4,000 per franchise, is not immediately recognized as revenue but is instead recognized over the five-year franchise term. This accounting practice is common in the franchise industry, as it aligns the revenue recognition with the period over which the franchisee benefits from the franchise rights and support provided by Gokhale Method.
In addition to franchise fees, Gokhale Method also earns revenue from royalties and other sources. As of December 31, 2020, royalty revenue was $42,599 and revenue from other sources totaled $7,670. These figures, combined with the franchise fees, contributed to Gokhale Method's total revenue of $75,845 for that year. Understanding the different revenue streams and how they are recognized is crucial for prospective franchisees to assess the financial health and stability of Gokhale Method.