What are the components of the audit fee for an Annex Brands franchise, and when is it due?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee (1) | Amount | Due Date | Remarks |
|---|---|---|---|
| Fee for required refresher courses or optional training programs (10) | Currently, not to exceed $300 per day | Before or at the time training is provided | Payable to us |
| Sales consultant fee | $12,000 to $36,000 | On or before the closing date of the transfer | If you use the services of any of our sales consultants (including outside agencies and brokers) to complete the transfer of your retail center, then, on or before transfer, you or the transferee must reimburse us an amount equal to any commission or other sales compensation that we must pay to the consultant(s). |
| Transfer of franchise (11) | 15% of then-current non-discounted initial franchise fee | On or before the closing date of the transfer | If you or selling franchisee qualifies for the VetFran Program, a 25% VetFran discount will be applied to the transfer fee. No more than 1 VetFran discount will be applied to the transfer fee. |
| Transfer of franchise to immediate family member (11) | Currently, $750 | On or before the closing date of the transfer | If you transfer controlling ownership interest in the franchise to an immediate family member as defined in the franchise agreement. |
| Transfer of franchise to your legal entity (12 & 13) | Currently, $350 | On or before the transfer | If you as (an) individual(s) transfer to a legal entity (corporation, limited liability corporation, partnership, trust, etc.) |
| Entity name change (non-transfer) (12) | Currently, $350 | Before change | If you (a corporation, limited liability corporation, partnership, trust, etc.) change the name of your legal entity. |
| Ownership change | Currently, $350 | Before change | If you change less than a controlling |
| (non-transfer) (12) | ownership interest in the franchise | ||
| Renewal | $8,500 | Before renewal | Depending on the type of retail center that you operate, if you are in good standing and meet our then-current qualifications for new franchisees and we are offering a renewal package for that type of center at the time that you renew, you may be eligible for certain benefits and/or facility upgrades. |
| Audit (14) | Cost of audit ($500 minimum) plus 1.5% per month interest or the highest rate allowed by law on underpayment. In addition, you must pay us a late fee of $35 per week. | 10 days after invoice | Payable to us if an inspection or audit is made necessary due to your failure to furnish reports, records, or other information to us on a timely basis, or if audit shows that you have understated any amount owed to us by more than 5% for any accounting period or if we discover a history of similar under reporting offenses. You must pay us by automatic bank draft. (3) |
Source: Item 6 — OTHER FEES (FDD pages 24–32)
What This Means (2025 FDD)
According to Annex Brands' 2025 Franchise Disclosure Document, the audit fee consists of the cost of the audit, with a minimum of $500, plus 1.5% per month interest (or the highest rate allowed by law) on any underpayment. Additionally, a late fee of $35 per week is charged. This fee is payable to Annex Brands 10 days after the invoice date.
The audit fee is incurred if an inspection or audit becomes necessary due to a franchisee's failure to provide timely reports, records, or other required information. It is also applied if an audit reveals that the franchisee has understated any amount owed to Annex Brands by more than 5% for any accounting period, or if there is a history of similar underreporting offenses. Franchisees are required to pay this fee via automatic bank draft.
This audit fee structure incentivizes franchisees to maintain accurate and timely financial reporting. The interest and late fee components serve as penalties for non-compliance or underreporting, ensuring that Annex Brands is compensated for the additional costs and administrative burden associated with conducting an audit. Prospective franchisees should be aware of these potential costs and ensure they have systems in place to accurately track and report their financial data to avoid triggering an audit and incurring these fees.