Does Gokhale Method have any transactions with related parties?
Gokhale_Method Franchise · 2024 FDDAnswer from 2024 FDD Document
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NOTE 1 – NATURE OF OPERATIONS
Gokhale Method Institute, Inc. ("GMI") was incorporated in 2011 as a California Sub-Chapter S Corporation by Gokhale Method Enterprise, Inc. ("GME"). The subsidiary was formed to franchise the Gokhale Method of dealing with back issues. GMI operates as a business and grants franchises for businesses offering classes and products that help restore the body's primal architecture and movement patterns under the "Gokhale Method" trademarks and related marks. GMI grants franchise licenses in a number of states and countries to practitioners who conduct classes in their franchise area in accordance with the Gokhale Method.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
General and Basis of Presentation
This summary of significant accounting policies of the Company is presented to assist in understanding the Company's financial statements.
Source: Item 22 — CONTRACTS (FDD page 34)
What This Means (2024 FDD)
According to the 2024 Gokhale Method Franchise Disclosure Document, Gokhale Method Institute, Inc. (GMI) has related party transactions with Gokhale Method Enterprises, Inc. (GME). GMI was incorporated by GME in 2011, making it a subsidiary.
Specifically, the FDD notes that accounts receivable for GMI primarily consist of net royalties receivable from franchises, teachers, or class fees collected by GME. This indicates that GME handles the collection of these revenues, which are then passed on to GMI, representing a significant transaction between the related entities.
Prospective franchisees should be aware of this relationship, as it means that a portion of their royalty payments are initially managed by GME before being distributed to GMI. Understanding the financial interactions between GMI and GME can provide a clearer picture of the overall financial structure of the Gokhale Method franchise system. It is advisable for potential franchisees to inquire about the specifics of this arrangement and how it might impact their financial obligations and reporting.