Under what circumstances will Bhc charge a fee for an audit, and what is the estimated cost?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| requested by you. | |||
| Audit | $10,000 to $20,000 | On receipt of invoice | You will pay us the costs of an audit to be performed if you fail to provide monthly financial statements, or if a random audit shows an understatement of Gross Revenue in excess of 2%. (6) |
- (6) We and our designated agents also have the right upon 10 days prior notice to examine, copy and audit the books and records relating to the Master Franchised BHC Restaurant and your operation of the Business.
If an examination or audit discloses any underpayment of any fee, you must promptly pay the deficient amount plus interest calculated daily from the due date until paid at an APR of 18% (unless interest rates on delinquent payments in the state in which Franchisee's Master Franchised BHC Restaurant is located are limited by law to a lower APR, in which case that lower APR will apply).
If an examination or audit discloses an underpayment or understatement of any amount due us by 2% or more, or if the examination or audit is made necessary by your failure to furnish required information or documents to us in a timely manner, or it takes our auditors an unreasonable amount of time (more than eight hours) to assemble your records for audit, you must reimburse us for the cost of having your books and records examined or audited (this remedy will be in addition to any other rights or remedies we have under this Agreement or otherwise, including our right to terminate the Franchise Agreement).
Source: Item 6 — Other Fees (FDD pages 12–18)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, an audit fee ranging from $10,000 to $20,000 may be charged under specific circumstances. Bhc will invoice this fee if a franchisee fails to provide monthly financial statements. Additionally, if a random audit reveals an understatement of Gross Revenue exceeding 2%, the franchisee will be responsible for covering the audit costs.
Bhc also retains the right to examine and audit a franchisee's books and records with 10 days' prior notice. If this audit uncovers an underpayment of any fee, the franchisee must pay the deficient amount along with interest calculated daily at an annual percentage rate (APR) of 18%, unless the state in which the franchise is located legally mandates a lower APR for delinquent payments.
Furthermore, Bhc may require the franchisee to reimburse the cost of the audit if the underpayment or understatement of any amount due is 2% or more. Reimbursement may also be required if the audit is necessitated by the franchisee's failure to provide required information or documents in a timely manner, or if it takes Bhc's auditors an unreasonable amount of time (more than eight hours) to assemble the franchisee's records for audit. This reimbursement is in addition to any other remedies Bhc has under the Franchise Agreement.