When is the audit cost due to Big Apple Bagels if an audit is necessary?

According to Big Apple Bagels's 2025 Franchise Disclosure Document, if an audit is necessary due to a franchisee's failure to furnish reports or if the audit reveals an under-reporting of 2% or more of Gross Revenues, the cost of the examination or audit is due 30 days after billing. This cost encompasses charges from independent accountants, travel expenses, room and board, and compensation for Big Apple Bagels employees involved in the audit.

This means that if Big Apple Bagels conducts an audit of a franchisee's store for the reasons specified, the franchisee will be responsible for covering all associated costs. These costs can potentially be substantial, as they include not only the fees charged by independent accountants but also the expenses incurred for travel, accommodation, and the time spent by Big Apple Bagels employees during the audit.

It is important for prospective Big Apple Bagels franchisees to maintain accurate and transparent financial records and to promptly submit all required reports to avoid triggering an audit. Failure to do so could result in significant financial burdens, as the franchisee would be liable for the full cost of the audit in addition to any other penalties or fees that may be imposed. Franchisees should ensure they understand the reporting requirements and maintain meticulous records to minimize the risk of an audit and its associated expenses.