What is the daily fee for Big Apple Bagels franchisees who fail to cooperate with an audit?
Big_Apple_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Fee for Failure to Cooperate with Audit | $20 per day | On demand, beginning on the 1st day of default | You must pay a $20 per day fee if you fail to provide us complete information (business records, bookkeeping and accounting records, bank statements, sales and income tax records and returns, POS System tapes or reports, and other books and records of the BAGELS Store) that we request in connection with an audit of your Store. |
| Audit | Cost of examination or audit, including charges of independent accountants and travel expenses, room and board, compensation of BAB employees. | 30 days after billing. | If audit is necessary due to your failure to furnish reports or if audit shows an under-reporting of 2% or more of Gross Revenues. |
Source: Item 6 — OTHER FEES (FDD pages 21–25)
What This Means (2025 FDD)
According to Big Apple Bagels' 2025 Franchise Disclosure Document, a franchisee who fails to cooperate with an audit will incur a fee of $20 per day. This fee is charged if the franchisee does not provide complete information requested by Big Apple Bagels in connection with an audit of their store. The information includes business records, bookkeeping and accounting records, bank statements, sales and income tax records and returns, POS System tapes or reports, and other books and records of the Big Apple Bagels Store.
The fee begins on the first day of default and is due on demand. This means that Big Apple Bagels can request immediate payment of the accrued fees. In addition to this daily fee, Big Apple Bagels can also conduct an audit at the franchisee's expense if the franchisee fails to furnish required reports or if the audit reveals an under-reporting of gross revenues by 2% or more.
This policy highlights the importance of maintaining accurate and complete records and cooperating fully with any audits conducted by Big Apple Bagels. Failure to do so can result in significant financial penalties, including the daily fee and the cost of the audit itself. Prospective franchisees should be aware of these requirements and ensure they have systems in place to comply with them.