Under what conditions does Bojangles require a franchisee to pay for an audit?
Bojangles Franchise · 2025 FDDAnswer from 2025 FDD Document
| 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. |
Source: Item 6 — OTHER FEES (FDD pages 21–24)
What This Means (2025 FDD)
According to Bojangles's 2025 Franchise Disclosure Document, franchisees may be subject to an audit under certain conditions. If an audit reveals deficiencies in the amounts owed to Bojangles, the franchisee is responsible for paying these deficiencies, along with interest. These payments are due upon receipt of an invoice from Bojangles.
More significantly, the franchisee is also responsible for covering all costs and expenses associated with the audit itself if the audit uncovers an understatement of 5% or more in the franchisee's reported financial figures. This provision serves as an incentive for franchisees to maintain accurate and transparent financial records.
This audit policy is fairly standard in the franchise industry, as franchisors need to ensure accurate reporting of gross sales for royalty calculations and brand consistency. The 5% threshold for covering audit costs is a notable point for prospective Bojangles franchisees to consider, as even unintentional accounting errors could lead to significant expenses.