Under what circumstances must a Bombs Away franchisee reimburse Bombs Away Franchising for the costs and expenses of an audit?

According to Bombs Away's 2024 Franchise Disclosure Document, a franchisee may be required to reimburse Bombs Away Franchising for the costs and expenses of an audit under specific circumstances. These circumstances include if the audit was conducted because the franchisee failed to submit required reports or was otherwise not in compliance with the Bombs Away system. Additionally, reimbursement is required if the audit reveals that the franchisee understated Gross Sales by 3% or more for any month.

This means that Bombs Away franchisees must maintain accurate and compliant records to avoid potential audit costs. Failure to adhere to reporting requirements or significant discrepancies in reported gross sales can trigger an audit at the franchisee's expense. The 3% threshold for understated gross sales provides a specific benchmark for determining when a franchisee will be responsible for audit costs.

This policy incentivizes franchisees to maintain accurate financial records and comply with reporting requirements. It also protects Bombs Away from potential revenue loss due to underreporting of sales. Franchisees should ensure they have systems in place to accurately track and report gross sales and maintain compliance with all system standards to avoid incurring audit-related expenses.