Under what conditions does All County assess auditing costs to a franchisee?
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, franchisees may incur auditing costs under specific circumstances. These costs, listed as "Actual Costs," are charged to reimburse All County's expenses for audits.
The FDD specifies that All County will assess these auditing costs if a franchisee fails to comply with the Franchise Agreement. This could include violations of operational standards, failure to meet performance metrics, or any other breach of contract. Another trigger for an audit, and subsequent assessment of costs, is if a franchisee fails to allow All County full access to their records. This condition underscores the importance of maintaining transparent and accessible financial and operational records.
Furthermore, All County will charge auditing costs if an audit reveals that a franchisee has underreported their Gross Receipts by 2% or more for two or more reporting periods. This condition highlights the importance of accurate financial reporting. Franchisees should ensure they have robust accounting practices in place to avoid discrepancies that could lead to an audit and additional costs. This is a fairly standard practice in franchising, as franchisors need to ensure accurate royalty payments and maintain the integrity of the brand's financial performance.