What financial threshold triggers the audit fee for a Body Brain Center franchisee?
Body_Brain_Center Franchise · 2025 FDDAnswer from 2025 FDD Document
- (9) The audit fee must be paid only if (i) we find, after an audit, that you have understated any amount due to us by at least 3% for any monthly period or (ii) the examination or audit is required due to your failure to furnish required information or reports to us in a timely manner or record sales properly.
In addition to the audit fee, you must pay us all past due amounts, together with any applicable late fee.
Source: Item 6 — OTHER FEES (FDD pages 11–14)
What This Means (2025 FDD)
According to the 2025 Body Brain Center Franchise Disclosure Document, an audit fee may be imposed on franchisees under specific circumstances. The audit fee is triggered if an audit reveals that a franchisee has understated the amount due to Body Brain Center by at least 3% for any monthly period. Additionally, the fee is applicable if an audit is required because the franchisee failed to provide necessary information or reports promptly or did not accurately record sales.
In addition to covering the actual cost of the audit, Body Brain Center also charges a fixed $2,500 fee, plus the franchisee must cover the travel and lodging expenses for the audit team. This means that franchisees must ensure accurate financial reporting and timely submission of required documents to avoid incurring these potentially significant audit-related expenses.
It is important to note that the audit fee is not a routine charge but is contingent on specific findings or failures related to financial reporting. This policy incentivizes franchisees to maintain accurate records and adhere to reporting deadlines, as failure to do so could result in substantial additional costs.