Under what circumstances would a Bojangles franchisee be required to pay for an audit, and what does this entail?
Bojangles Franchise · 2025 FDDAnswer from 2025 FDD Document
M 6 OTHER FEES**
| Type of Fee1 | Amount | Due Date | Comments |
|---|---|---|---|
| Audit | Deficiencies in amounts owed, plus interest | Payable upon invoice. | You also must pay all costs and expenses connected with the audit if an audit reveals an understatement of 5% or more. |
| Interest | 1.5% per month compounded monthly or the maximum rate permitted by law, whichever is less | Payable upon demand. | Payable on any overdue amount or underpayment from the date such amount was due until paid. |
Source: Item 6 — OTHER FEES (FDD pages 21–24)
What This Means (2025 FDD)
According to Bojangles's 2025 Franchise Disclosure Document, a franchisee may be subject to an audit under specific circumstances. If an audit reveals that the franchisee has understated the amounts they owe to Bojangles by 5% or more, the franchisee is responsible for covering all costs and expenses associated with the audit. This includes not only the deficiencies in the amounts owed, plus interest, but also the full cost of conducting the audit itself. The amount owed is payable upon the invoice date.
This provision serves as a financial safeguard for Bojangles, ensuring accurate reporting and payment of fees. It also motivates franchisees to maintain meticulous records and transparently report their financial data. The interest charged is 1.5% per month compounded monthly or the maximum rate permitted by law, whichever is less. This interest applies to any overdue amount or underpayment from the date the amount was due until it is paid.
For a prospective Bojangles franchisee, this highlights the importance of accurate financial reporting. Underreporting, even unintentionally, can lead to significant financial penalties beyond the original underpayment. Franchisees should invest in robust accounting practices and regularly review their financial data to ensure compliance with Bojangles's reporting requirements. This will help avoid the triggering of an audit and the potential for incurring additional costs.