What is the estimated range of costs for Bft Audit Fees?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Music Licensing Fee 4 | Amounts charged by the providers and/or applicable performing rights organizations (PROs) for such music licensing | As invoiced or otherwise agreed | We may require that the music licensing fee (the “Music Licensing Fee”) amount be paid directly to performing rights organizations (PROs) or to our then-current Approved Supplier (which may be us or our affiliate) that handles and manages these licenses for System franchisees. |
| Insurance Policies 5 | Amount of unpaid premium | As agreed | Payable only if you fail to maintain required insurance coverage and we elect to obtain coverage for you. |
| Audit Fees 6 | Costs incurred by us in connection with conducting audit Currently, we estimate that such costs will typically be between $500 to $2,500 (plus costs of any travel) | Within 15 calendar days after receipt of audit report | Payable only if (a) an audit or review shows an understatement of Gross Sales for the audited period of 2% or more, or (b) the audit or review is being conducted in response to your failure to timely submit any reports required by your Franchise Agreement. |
| Mystery Shopper and Other Quality Control Programs | If charged, up to $500 per year | Within 30 days of demand | Payable only if we establish a mystery shopper program or other quality control mechanism or program, in which case we may require a franchisee to contribute up to $500/year to help defray the costs of such programs that are designed to preserve the goodwill and brand image. These fees are not currently imposed. |
| Late Fees | The lesser of (a) the highest applicable legal rate for open account business credit, or (b) 1.5% per month | Upon demand | Applies to all amounts not paid when due, until paid in full. We may also require you to pay an administrative fee of $50 for each late payment or late report. |
| Non-Compliance Fee | $100 for each day of non-compliance | Upon demand | Payable only in the event you fail to comply with your material obligations under your Franchise Agreement. The Non-Compliance Fee will be incurred during each day of non-compliance. |
| Cost of Enforcement or Defense | All costs including attorneys’ fees | Upon settlement or conclusion of claim or action | You will reimburse us for all costs in enforcing our obligations concerning the Franchise Agreement if we prevail. |
| Indemnification | All costs including attorneys’ fees | Upon settlement or conclusion of claim or action | You will defend suits at your own cost and hold us harmless against suits involving damages resulting from your operation of the Studio. |
Source: Item 6 — OTHER FEES (FDD pages 21–26)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, franchisees may incur audit fees ranging from $500 to $2,500, plus the cost of any travel expenses related to the audit. These fees are only payable if an audit reveals an understatement of Gross Sales by 2% or more, or if the audit is conducted due to the franchisee's failure to submit required reports on time. The audit fees must be paid within 15 calendar days after receiving the audit report.
This means that if a Bft franchisee accurately reports their gross sales and submits all required reports promptly, they will not typically be charged audit fees. However, if discrepancies are found or reports are missing, the franchisee becomes responsible for covering the costs Bft incurs to conduct the audit, in addition to any travel costs.
It is important for prospective Bft franchisees to understand the conditions under which audit fees may be charged and to ensure accurate record-keeping and timely submission of reports to avoid these fees. Franchisees should factor in the potential for these fees when assessing the overall costs of operating a Bft franchise, especially if they anticipate any challenges in maintaining accurate records or meeting reporting deadlines. Audit fees are not uncommon in franchising, as franchisors need to ensure brand standards and accurate royalty payments, but the specific triggers and amounts can vary significantly.