How does the Bojangles's Item 6 audit fee relate to the franchisor's assistance in Item 11?

According to Bojangles's 2025 Franchise Disclosure Document, Item 6 details the audit fees that a franchisee may incur, while Item 11 outlines the assistance, advertising, computer systems, and training provided by Bojangles. Specifically, if Bojangles conducts an audit and discovers an understatement of amounts owed by 5% or more, the franchisee is responsible for covering all costs and expenses associated with the audit, in addition to paying the deficiencies and interest. This audit process is tied to Bojangles's right to inspect the franchisee's books and records, as detailed in the franchise agreement.

Item 11 states that Bojangles may offer advice and consultation in areas such as restaurant management, food preparation, and sales promotion. They may send employees or representatives to the restaurant, provide written materials or electronic content, or conduct meetings or seminars. Bojangles also performs inspections of the restaurant and evaluates products and services. The audit fee in Item 6 comes into play if these inspections or a separate audit reveals financial discrepancies.

In essence, the audit fee serves as a financial consequence if a Bojangles franchisee's financial reporting is inaccurate, particularly if the understatement is significant. This mechanism incentivizes accurate reporting and compliance with the franchise agreement. While Bojangles provides support and training to help franchisees operate successfully, the responsibility for accurate financial reporting ultimately rests with the franchisee, and failure to meet this responsibility can result in additional costs.