What do the audit expenses for a 1-800-GOT-JUNK? franchise cover?
1_800_Got_Junk Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 6: Other Fees]
Name of Fee Amount Due Date Remarks Audit Expenses Costs of examination or audit (approximately $3,000 to $7,500 but may be more), plus any deficiency in amounts that should have been paid to us. Subject to increase; see Note 4. Upon demand. Payable if our examination reveals a material deficiency in any report delivered by you. See Section 8.5 of the Franchise Agreement.
Source: Item 6 — Other Fees (FDD pages 11–17)
What This Means (2025 FDD)
According to 1-800-GOT-JUNK?'s 2025 Franchise Disclosure Document, audit expenses cover the costs of an examination or audit, which range approximately from $3,000 to $7,500, but may be more. These expenses also include any deficiency in amounts that should have been paid to 1-800-GOT-JUNK?. Note 4 indicates that this amount is subject to increase.
The audit expenses are payable upon demand if an examination reveals a material deficiency in any report delivered by the franchisee. This is further detailed in Section 8.5 of the Franchise Agreement.
In essence, if 1-800-GOT-JUNK? finds discrepancies in a franchisee's reporting that lead to underpayment, the franchisee will be responsible for covering the audit costs in addition to rectifying the payment shortfall. This incentivizes accurate and transparent reporting from franchisees to avoid these additional expenses.