What is an 'Accounting Procedure Notice' that Baymont Inn Suites might include in a notice of default?
Baymont_Inn_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
Our notice of default may include, in our sole discretion and as part of your performance needed to cure the default under this Section 3.6, an "Accounting Procedure Notice." The Accounting Procedure Notice requires that you obtain and deliver to us, within 90 days after the end of each of your next three fiscal years ending after the Accounting Procedure Notice, an audit opinion signed by an independent certified public accountant who is a member of the American Institute of Certified Public Accountants addressed to us that the Facility's Gross Room Revenues you reported to us during the fiscal year fairly present the Gross Room Revenues of the Facility computed in accordance with this Agreement for the fiscal year. You also must pay any deficiency in Recurring Fees, any Audit Fee, as defined in Section 4.8, we assess you for your default of Section 3.6 as described in Section 4.8, and/or other charges we identify and invoice as a result of the audit.
Source: Item 23 — RECEIPTS (FDD pages 97–443)
What This Means (2025 FDD)
According to Baymont Inn Suites's 2025 Franchise Disclosure Document, an Accounting Procedure Notice is a requirement that Baymont Inn Suites may include in a notice of default related to financial reporting. If a franchisee fails to accurately report Gross Room Revenues, Baymont Inn Suites may issue this notice as part of the steps required to correct the default.
Specifically, the Accounting Procedure Notice mandates that the franchisee obtain and deliver to Baymont Inn Suites an audit opinion from an independent certified public accountant. This CPA must be a member of the American Institute of Certified Public Accountants. The audit opinion must confirm that the franchisee's reported Gross Room Revenues fairly represent the actual Gross Room Revenues of the facility, computed in accordance with the franchise agreement, for each of the three fiscal years following the notice. The franchisee has 90 days after the end of each fiscal year to provide this audit opinion.
In addition to providing the audit opinion, the franchisee is also responsible for paying any deficiencies in Recurring Fees, Audit Fees, and other charges that Baymont Inn Suites identifies as a result of the audit. This means that the franchisee could face significant additional expenses beyond the cost of the audit itself, including back payments of underreported fees and potential penalties. This requirement is triggered if the franchisee does not cure a violation related to financial books and records within 30 days after the initial audit, cancels two or more scheduled audits, refuses to admit auditors or produce required documents, presents incomplete or tampered books, or reports less than 97% of the facility's Gross Room Revenues for any fiscal year preceding the audit.