When is the Business/Financial Audit fee due for an Afuri Ramen Dumpling franchise?
Afuri_Ramen_Dumpling Franchise · 2024 FDDAnswer from 2024 FDD Document
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| Type of Fee | Amount | Date Due | Remarks |
|---|---|---|---|
| Franchise Agreement Section 5.1). | |||
| Non-Cash Payment Systems | All costs associated with non-cash payment systems | As incurred | You must accept debit cards, credit cards, stored value gift cards or other non-cash payment systems we specify. |
| Manual Replacement Fee | $500 | On demand | You pay this fee if you lose the copy of the Operations Manual we loan to you. |
| Re-Inspection Fee | $500 per re-inspection | On demand | You pay this fee if we must re-visit your location for an inspection after you have already been notified of any deficiency or non satisfactory condition. |
| Liquidated Damages | An amount equal to two times the total Royalty Fees paid (or if unpaid, payable) by you during the 24 months before the termination date. | Within 30 days following the date of termination. | Payable if you default and we terminate your Franchise Agreement. |
| Sanitation and Food Safety Audits | Cost of the inspection | On demand | We may, in our sole discretion, contract with a third party to conduct sanitation and food safety audits during the term of your Franchise Agreement. |
| Business/Financial Audit7 | Our reasonable costs for the audit if you understate revenue by more than 2% or fail to deliver to us required reports on time | Immediately upon demand | See notes below. |
| Participation in Advisory Council | As incurred | As incurred | If you participate on an Advisory Council, you will pay any costs you incur related to your participation, such as travel and living expenses |
Source: Item 6 — Other Fees (FDD pages 11–16)
What This Means (2024 FDD)
According to Afuri Ramen Dumpling's 2024 Franchise Disclosure Document, the Business/Financial Audit fee is due immediately upon demand. This fee is imposed to cover Afuri Ramen Dumpling's reasonable costs for conducting an audit under specific circumstances.
Specifically, Afuri Ramen Dumpling will only charge this fee if a franchisee understates their revenue by more than 2% or fails to deliver required reports on time. This policy incentivizes accurate financial reporting and timely submission of necessary documents. The audit itself can occur at any time during normal business hours, allowing Afuri Ramen Dumpling to regularly check financial records.
If an audit reveals an understatement of revenue exceeding the 2% threshold or a failure to provide required reports promptly, the franchisee becomes responsible for covering all associated audit costs. These costs encompass charges from any independent accountant involved, as well as the travel expenses, room and board, and compensation for Afuri Ramen Dumpling's employees who participate in the audit. Furthermore, the franchisee is obligated to immediately pay any outstanding Royalty Fees, Advertising Fees, and other fees or late payment charges identified during the audit. It's important to note that these payments do not limit any other legal remedies Afuri Ramen Dumpling may pursue under the Franchise Agreement or applicable laws.