If Bb.Q Chicken discovers inconsistencies or mistakes in a franchisee's statements or payments, what is the franchisee required to do?
Bb_Q_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
You understand and agree that our receipt or acceptance of any of the statements furnished or Royalty Fees and other fees paid to us (or the cashing of any checks or processing of any EFTs) shall not preclude us from questioning the correctness thereof at any time and, in the event that any inconsistencies or mistakes are discovered in such statements or payments, they shall immediately be rectified by you and the appropriate payment shall be made by you.
Source: Item 23 — RECEIPTS (FDD pages 62–283)
What This Means (2025 FDD)
According to Bb.Q Chicken's 2025 Franchise Disclosure Document, if Bb.Q Chicken discovers any inconsistencies or mistakes in a franchisee's submitted statements or payments, the franchisee is obligated to immediately rectify the errors and make the appropriate payment. This requirement ensures that all financial reporting and payments are accurate and up-to-date. Bb.Q Chicken retains the right to question the correctness of statements and payments at any time, even after receipt or acceptance.
This clause protects Bb.Q Chicken from potential underreporting or errors in payments from franchisees. It places the onus on the franchisee to maintain accurate records and promptly correct any discrepancies. Franchisees should implement robust accounting practices to minimize errors and ensure timely and accurate payments to Bb.Q Chicken.
Furthermore, if an inspection reveals that payments have been understated in any report to Bb.Q Chicken, the franchisee must immediately pay the overdue or understated amount upon demand, along with interest. If the understatement of Royalty Fees due is two percent (2%) or more, the franchisee will also be responsible for reimbursing Bb.Q Chicken for the cost of the examination. Such an understatement may be considered a material default, and three such understatements during the term of the Franchise Agreement may be considered an incurable default, potentially leading to termination of the agreement.