Under what condition is a Batteries Plus Bulbs franchisee required to pay an audit fee?

According to Batteries Plus Bulbs' 2025 Franchise Disclosure Document, a franchisee is required to pay an audit fee only if an audit reveals an understatement of at least 2% of Net Revenues for any month. The audit fee is the cost of the audit plus 1½% interest per month from the due date. The fee is due 30 days after billing.

This means that Batteries Plus Bulbs franchisees must accurately report their Net Revenues. If a franchisee underreports their Net Revenues by 2% or more in any given month, they will be subject to an audit. If the audit confirms the understatement, the franchisee will be responsible for covering the cost of the audit itself, in addition to interest on the unpaid amount.

For a prospective Batteries Plus Bulbs franchisee, this highlights the importance of maintaining accurate financial records and reporting revenues honestly. Underreporting revenue, even unintentionally, can lead to significant additional expenses in the form of audit fees and interest. This policy incentivizes franchisees to ensure their accounting practices are thorough and transparent, minimizing the risk of triggering an audit and its associated costs.