Under what conditions are Audit Costs payable to Benjamin Franklin Plumbing?
Benjamin_Franklin_Plumbing Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee (1) | Amount | Date Due | Remarks |
|---|---|---|---|
| Audit Costs | Our actual costs and expenses of conducting audit, including travel and lodging. | Upon demand | Payable only if: (a) you did not submit Gross Revenue statements; (b) you did not keep full books and records; or (c) the total Gross Revenue you reported for any three consecutive months is more than 2% below the audited Gross Revenue. |
Source: Item 6 — OTHER FEES (FDD pages 18–27)
What This Means (2025 FDD)
According to Benjamin Franklin Plumbing's 2025 Franchise Disclosure Document, franchisees may be required to cover the costs associated with an audit under specific circumstances. These audit costs, which include the actual expenses incurred for conducting the audit, such as travel and lodging, become payable upon demand from Benjamin Franklin Plumbing.
The conditions that trigger the franchisee's responsibility for these audit costs are:
- Failure to submit Gross Revenue statements to Benjamin Franklin Plumbing.
- Failure to maintain complete and accurate books and records as required by the franchise agreement.
- Reporting Gross Revenue that is significantly lower than the audited amount. Specifically, if the total Gross Revenue reported by the franchisee for any three consecutive months is more than 2% below the Gross Revenue determined by the audit, the franchisee will be responsible for covering the audit costs.
This policy is fairly standard in franchising, as franchisors need to ensure accurate reporting of revenue for royalty calculations and the overall financial health of the franchise system. It is important for prospective Benjamin Franklin Plumbing franchisees to maintain meticulous records and submit timely and accurate Gross Revenue statements to avoid incurring these potentially significant audit costs.