When can Afuri Ramen Dumpling audit a franchisee's business records?
Afuri_Ramen_Dumpling Franchise · 2024 FDDAnswer from 2024 FDD Document
- Audits. We may audit your reports, books, statements, business records, cash control devices, and tax returns at any time during normal business hours. Audits will be conducted at our expense unless you understate the Revenue for any reported period or periods by more than 2 percent or unless you fail to deliver any required report of Revenue or any required financial statement in a timely manner. In the event of an understatement or failure to deliver, you will reimburse us for all audit costs. These will include, among other things, the charges of any independent accountant and the travel expenses, room, board, and compensation of our employees incurred in connection with the audit. You will immediately pay all Royalty Fees, Advertising Fees, all other fees and late payment charges that the audit determines are owed. These payments will not prejudice any other remedies we may have under this Agreement or by law.
Source: Item 6 — Other Fees (FDD pages 11–16)
What This Means (2024 FDD)
According to Afuri Ramen Dumpling's 2024 Franchise Disclosure Document, Afuri Ramen Dumpling can audit a franchisee's business records at any time during normal business hours. This includes reports, books, statements, business records, cash control devices, and tax returns.
Typically, Afuri Ramen Dumpling will cover the costs of these audits. However, if an audit reveals that the franchisee has understated revenue by more than 2% for any reporting period, or if the franchisee fails to submit required revenue reports or financial statements on time, the franchisee will be responsible for reimbursing Afuri Ramen Dumpling for all audit costs. These costs may include charges from independent accountants, as well as travel expenses, room and board, and compensation for Afuri Ramen Dumpling's employees involved in the audit.
Furthermore, if an audit uncovers that a franchisee owes additional Royalty Fees, Advertising Fees, or other fees and late payment charges, the franchisee must make immediate payment. These payments do not affect any other remedies that Afuri Ramen Dumpling may pursue under the Franchise Agreement or by law. This means that in addition to paying the owed amounts and covering audit costs, the franchisee could face further penalties or legal action.