Who bears the cost of an independent audit of an Amerispec Inspection Services franchisee's books?
Amerispec_Inspection_Services Franchise · 2025 FDDAnswer from 2025 FDD Document
tax returns specified above to the Company and hereby waive any right to refuse to provide tax return or any privilege afforded by state or federal laws, rules or regulations.
- 12.5 Audit Costs. The Company shall also have the right, at any time, to have an independent audit made at its cost of the books of the Franchisee. Franchisee shall pay the cost of the audit. These costs shall be capped at $2,000, subject to the terms of this paragraph. If Franchisee fails to fully cooperate with any reasonable request by the Company for an audit or inspection, Franchisee shall reimburse the Company for any and all costs and expenses of conducting an audit or inspection including, without limitation, travel expenses, room and board, and compensation of persons employed by the Company to make the audit or inspection. If any audit discloses an understatement of the Gross Receipts of the Franchised Business for any period or periods, the Franchisee, within 10 days of receipt of the audit report, shall pay to the Company the Advertising Contributions and Royalties, if any, due on the previously unreported Gross Receipts, plus interest from the due date at the maximum rate permitted by law, not to exceed 1.5% per month. In addition, if an understatement for any period equals 3% or more of the Gross Receipts of the Franchised Business
for the period, the Franchisee shall reimburse the Company for the full cost of the audit or inspection, including, without limitation, the charges of any independent accountant or attorney and the travel expenses, room and board, and compensation of persons employed by the Company to make the audit or inspection. Reimbursement to the Company for the costs of the audit or inspection shall be made upon the receipt
Source: Item 23 — Receipts (FDD pages 47–172)
What This Means (2025 FDD)
According to Amerispec Inspection Services's 2025 Franchise Disclosure Document, the franchisee is generally responsible for covering the costs of an independent audit of their books. The cost of the audit is capped at $2,000.
However, there are circumstances where the franchisee may be responsible for additional audit costs. If the franchisee fails to cooperate with reasonable requests during an audit or inspection, they will reimburse Amerispec Inspection Services for all associated costs, including travel, lodging, and compensation for personnel involved in the audit.
Furthermore, if an audit reveals an understatement of gross receipts equal to or exceeding 3% for any period, the franchisee is responsible for reimbursing Amerispec Inspection Services for the full cost of the audit or inspection. This includes charges from independent accountants or attorneys, as well as travel expenses, room and board, and compensation for personnel employed by Amerispec Inspection Services to conduct the audit or inspection. Unreimbursed costs will accrue interest at the maximum legal rate, not exceeding 1.5% per month, if not paid within 10 days of receiving an invoice.