Under what conditions will a Beehive Homes franchisee bear the cost of inspections and audits?
Beehive_Homes Franchise · 2025 FDDAnswer from 2025 FDD Document
9.3. Inspections and Audits. The accounts, books, records and tax returns of the Franchisee shall be open for inspection, examination and audit by Franchisor and its authorized representatives at all times. Any such inspection, examination or audit shall be at the requesting party's cost and expense unless (i) the same is necessitated by Franchisee's failure to prepare and deliver its data, reports and statements required hereunder, (ii) the same is necessitated by Franchisee's failure to keep and preserve records as hereinabove provided, or (iii) such inspection discloses that any such data, report or statement made and delivered by Franchisee is in error to an extent of two (2%) percent or more, in any of which events, such cost and expense shall be borne and paid directly by Franchisee, or be reimbursed to Franchisor, as the case may be, immediately upon demand.
Source: Item 23 — RECEIPTS (FDD pages 34–123)
What This Means (2025 FDD)
According to Beehive Homes' 2025 Franchise Disclosure Document, the franchisee typically bears the cost of inspections and audits conducted by Beehive Homes. However, there are specific circumstances under which the Beehive Homes franchisee will be responsible for these costs.
The franchisee will bear the cost of inspections and audits if the inspection is required because the franchisee failed to prepare and deliver required data, reports, and statements. Additionally, the franchisee is responsible for the costs if the inspection is due to the franchisee's failure to keep and preserve records as required.
Finally, if an inspection reveals that any data, report, or statement provided by the franchisee contains an error of two percent (2%) or more, the franchisee will be responsible for covering the costs and expenses associated with the inspection or audit. In any of these cases, the franchisee must either directly pay the costs or reimburse Beehive Homes immediately upon demand.