Under what two specific conditions is a Bombs Away franchisee required to pay for an audit?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Payable only if (1) we audit you because | |||
| you have failed to submit required reports | |||
| or other non-compliance, or (2) the audit | |||
| concludes that you under-reported gross | |||
| sales b |
Source: Item 6 — OTHER FEES (FDD pages 9–13)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, a franchisee may be required to cover the costs of an audit under specific circumstances. These circumstances arise if the franchisee (1) fails to submit required reports or demonstrates other forms of non-compliance, or (2) if an audit reveals that the franchisee has under-reported gross sales.
This means that Bombs Away franchisees must ensure timely and accurate submission of all required reports to remain compliant with the franchise agreement. Additionally, franchisees must maintain accurate records of their gross sales, as any under-reporting discovered during an audit will trigger the franchisee's responsibility to cover the audit expenses.
For a prospective Bombs Away franchisee, this highlights the importance of diligent record-keeping and adherence to reporting requirements. Failure to comply can result in unexpected audit costs, impacting the profitability of the franchise. It is advisable to fully understand the reporting requirements and compliance standards outlined in the franchise agreement to avoid these potential expenses.