If I understate any amount I owe to Baya Bar, what are the consequences?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
| (1) | (2) | (3) | (4) |
|---|---|---|---|
| Fees (1) | Amount | Due Date | Remarks |
| Pre-Opening Training (For New or Replacement Employees) | Our then-current per session training fee, plus expenses Current per session training fee = $3,000 | Before Training | We will train up to three people at no additional charge. If you request that we provide our pre-opening training program to any additional employees, or to new or replacement employees during the term of your Franchise Agreement, you must pay our training fee as well as the trainees' expenses, including travel, lodging, meals and wages. |
| Additional Onsite Training/Remedial Training | Our then-current per diem rate per trainer, plus expenses Current per diem rate = $600 | When billed | If you request that we provide additional training or support at your Shop, or if as the result of an inspection or quality assurance audit we believe that remedial training is necessary, you must pay our daily fee for each trainer we send to your Shop, and you must reimburse each trainer's expenses, including travel, lodging and meals. |
| Interest | 18% per annum or the highest interest rate allowed by applicable law, whichever is less | On demand | Interest may be charged on all overdue amounts. Interest accrues from the original due date until payment is received in full. * See below |
| Audit Fee | Cost of audit (estimated to be between $1,000 and $5,000) | When billed | Payable only if we find, after an audit, that you have understated Gross Sales by 2% or more or you have understated any amount you owe to us. You must also pay the understated amount plus interest. |
| (1) | (2) | (3) | (4)
Source: Item 6 — OTHER FEES (FDD pages 11–16)
What This Means (2024 FDD)
According to Baya Bar's 2024 Franchise Disclosure Document, if an audit reveals that you have understated your Gross Sales by 2% or more, or if you have understated any amount you owe to Baya Bar, you will be responsible for covering the cost of the audit. The cost of the audit is estimated to be between $1,000 and $5,000.
In addition to covering the audit fees, you must also pay the understated amount, along with interest. The interest rate applied to all overdue amounts is 18% per annum, or the highest interest rate allowed by applicable law, whichever is less. Interest accrues from the original due date until the full payment is received.
It is important to accurately report your gross sales and any other amounts owed to Baya Bar to avoid these potential penalties. Franchisees should maintain accurate records and consult with a financial professional if they have any questions about reporting requirements.