When are the Audit Fees for a Beehive Homes franchise due?
Beehive_Homes Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee (1) | Amount of Fee | When Due | To Whom Paid |
|---|---|---|---|
| Royalty (2) | 5% of Gross Revenues | monthly | US |
| Training (3) | not les |
Source: Item 6 — OTHER FEES (FDD pages 11–13)
What This Means (2025 FDD)
According to Beehive Homes' 2025 Franchise Disclosure Document, audit fees are due when incurred. The FDD specifies that Beehive Homes requires franchisees to submit financial reports and information, which the franchisor has the right to audit. While Beehive Homes covers the cost of these audits, if an audit reveals that the franchisee has understated gross revenues by 2% or more for any period, the franchisee is responsible for reimbursing Beehive Homes for the audit costs.
In practical terms, this means a Beehive Homes franchisee will only pay audit fees if their financial reporting is inaccurate by a significant margin. The fees themselves represent the actual cost of the audit, which could vary depending on the scope and complexity of the audit. It is important for franchisees to maintain accurate financial records to avoid triggering an audit that results in them having to pay these fees.
This arrangement is fairly standard in franchising. Franchisors need to ensure accurate royalty payments, which are typically a percentage of gross revenues. The audit provision serves as a deterrent against underreporting income and ensures that Beehive Homes receives the correct royalty payments from its franchisees. Franchisees should be aware of this provision and maintain meticulous records to avoid any discrepancies.