Under what conditions does All County assess auditing costs?
All_County Franchise · 2025 FDDAnswer from 2025 FDD Document
| TYPE OF FEE | AMOUNT | DUE DATE | REMARKS |
|---|---|---|---|
| Auditing Costs | Actual Costs | Reimbursement of our actual auditing costs | We assess this charge only for audits needed in the event you fail to comply with the Franchise Agreement, fail to allow full access to your records, or we find that you underreported your Gross Receipts by 2% or more for two or more reporting periods. |
Source: Item 7 — Estimated Initial Investment (FDD pages 12–16)
What This Means (2025 FDD)
According to All County's 2025 Franchise Disclosure Document, auditing costs are assessed to franchisees under specific circumstances related to compliance and financial reporting accuracy. These costs are not a standard fee but are triggered by certain actions or failures on the part of the franchisee.
The auditing costs, which are the actual costs incurred by All County for conducting the audit, are charged to the franchisee if they fail to comply with the Franchise Agreement. This could include violations of operational standards, brand guidelines, or other contractual obligations. Additionally, All County will assess auditing costs if a franchisee fails to allow full access to their records, hindering the franchisor's ability to verify financial information or operational practices.
Furthermore, auditing costs are applied if All County discovers that a franchisee has underreported their Gross Receipts by 2% or more for two or more reporting periods. This condition is particularly important as it highlights the need for accurate and transparent financial reporting. Franchisees should ensure they maintain meticulous records and report their earnings accurately to avoid triggering an audit and incurring these costs. This policy is fairly standard in franchising, as franchisors need to protect the integrity of the brand and ensure fair royalty payments.