To whom are the Audit Fees paid for a Beehive Homes franchise?
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 less than $300 per day inclusive | when incurred | US |
| Consultation After | not less than $300 per day | when negotiated | US |
| Opening (4) | inclusive | ||
| Audit Fees (5) | actual cost | when incurred | Third Parties |
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 paid to third parties. The franchisee is required to submit financial reports and information to Beehive Homes, who has the right to audit these reports. While Beehive Homes covers the initial cost of the audit, if the audit reveals an understatement of 2% or more in the franchise's gross revenues for any period, the franchisee is responsible for reimbursing Beehive Homes for the audit costs.
This means that as a Beehive Homes franchisee, you should ensure accurate financial reporting to avoid potential audit fee reimbursements. The audit fees themselves are paid to the third-party auditor, not directly to Beehive Homes, unless the conditions for reimbursement are met. This arrangement is fairly standard in franchising, where franchisors need to verify revenue for royalty calculations but often use independent auditors.
Prospective franchisees should consider this potential expense when projecting their operating costs. Maintaining meticulous financial records and implementing robust accounting practices can help minimize the risk of triggering an audit that leads to reimbursement obligations. Franchisees should clarify with Beehive Homes which third-party auditors they typically use and what the average cost of an audit might be to better prepare for this potential expense.