What happens if an underpayment of Royalty Fees is discovered for a Benjamin Franklin Plumbing franchise?
Benjamin_Franklin_Plumbing Franchise · 2025 FDDAnswer from 2025 FDD Document
If you or we discover at any time, by means of an audit or otherwise, that there has been an underpayment of Royalty Fees or other amounts due, you are required to promptly pay the amount due, together with applicable late fees and interest.
Your payment and our acceptance of the overdue amounts will not constitute a waiver of or prejudice our right to exercise any other remedy in this Agreement, including termination.
- 8.6. Cost of Examination or Audit.
If we perform an examination or audit due to: (i) your failure to submit reports of Gross Revenue or required financial statements, or (ii) your failure to maintain books and records as required, or if (iii) the cumulative Gross Revenue you report for any period of three consecutive months is more than 2% below the actual Gross Revenue for the period as determined by the examination or audit, then you are required to pay us the cost of the examination or audit, including travel and lodging expenses for the examiners or auditors.
For purposes of calculating the cost, we will use hourly rates for our own personnel that are consistent with the rates of mid-level professionals of independent accounting firms.
- 8.7. Business and Customer Data.
In this Section: "Customer Data" means Personal Information (as defined below), sales and payment history, and all other information about any person or entity the Franchised Businesses have serviced, wherever stored, including data regarding customers of businesses converted to a Franchised Business, and any other information we may identify in the Brand Standards Manuals; "Personal Information" includes any information that, by itself or in conjunction with other information, may be used to specifically identify an individual, such as name, physical address, telephone number, e-mail address, social media accounts, billing and payment history, customer service requests, and any other information as defined in applicable law; and "Business Data" means all financial reports, vendor and supplier pricing data, and all other data about the Franchised Businesses other than Customer Data.
Franchisee agrees that:
- 8.7.1 We have the right to independently access all Business Data, wherever maintained.
Franchisor also has the right to require Franchisees to deliver Business Data to Franchisor.
Source: Item 23 — RECEIPTS (FDD pages 88–312)
What This Means (2025 FDD)
According to the 2025 Benjamin Franklin Plumbing Franchise Disclosure Document, if an underpayment of Royalty Fees or other amounts due is discovered through an audit or other means, the franchisee is required to promptly pay the amount due, along with applicable late fees and interest. This payment does not waive Benjamin Franklin Plumbing's right to exercise other remedies, including termination of the franchise agreement.
If Benjamin Franklin Plumbing performs an examination or audit due to the franchisee's failure to submit reports of Gross Revenue or required financial statements, failure to maintain books and records as required, or if the cumulative Gross Revenue reported for any three consecutive month period is more than 2% below the actual Gross Revenue for the period as determined by the examination or audit, the franchisee is required to pay the cost of the examination or audit. This cost includes travel and lodging expenses for the examiners or auditors, calculated using hourly rates consistent with those of mid-level professionals of independent accounting firms.
Benjamin Franklin Plumbing also has the right to independently access all Business Data, which includes financial reports and vendor pricing data. Franchisees may also be required to deliver Business Data to Benjamin Franklin Plumbing. These measures ensure Benjamin Franklin Plumbing can monitor financial performance and compliance with the franchise agreement, and address any underpayments or discrepancies in Royalty Fees.