When is the cost of inspection due for an All States M.E.D. audit fee?
All_States_M_E_D Franchise · 2024 FDDAnswer from 2024 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Audit Fee | Cost of inspection plus the amount of the underpayment plus interest from the date such amount was due until received by Franchisor, paid at the rate of the lesser of 1.5% per month or the highest commercial contract interest rate allowed by law | Cost of inspection – at time of inspection; Underpayment and interest – immediately. | Amounts beyond the underpayment are due if the audit or any other inspection reveals an underpayment of 2% or more. FA 12.6. |
Source: Item 6 — OTHER FEES (FDD pages 12–16)
What This Means (2024 FDD)
According to All States M.E.D.'s 2024 Franchise Disclosure Document, the cost of inspection for an audit fee is due at the time of the inspection. If an audit reveals an underpayment of 2% or more, All States M.E.D. may require additional payments beyond the underpayment itself.
Specifically, if an audit uncovers an underpayment, the franchisee will also owe the amount of the underpayment plus interest. The interest is calculated from the date the amount was originally due until it is received by All States M.E.D. The interest rate applied will be the lesser of 1.5% per month or the highest commercial contract interest rate allowed by law.
Therefore, it is important for All States M.E.D. franchisees to maintain accurate financial records and make timely payments to avoid potential audit fees, underpayment penalties, and interest charges. Franchisees should ensure they understand the terms and conditions related to audits as outlined in their Franchise Agreement to mitigate financial risks.