What is the impact of the Boulder Designs audit on fees?
Boulder_Designs Franchise · 2025 FDDAnswer from 2025 FDD Document
atsoever. | | Name of Fee | Amount1 | Due Date | Remarks | |------------------------------------|-------------------------------------------------------------------------------------------|---------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | Audit Expenses | All costs and expenses associated with audit | Upon demand | Payable only if the audit shows an understatement in amounts due of 2% or more. | | Insurance Policies | Amount of unpaid premiums plus our reasonable expenses in obtaining the policies | Upon demand | Payable only if you fail to maintain required insurance coverage and we elect to obtain coverage for you. | | Transfer Fee | $7,500 | Time of transfer | Due when informing us of a transfer, which is not refundable.
Source: Item 6 — OTHER FEES (FDD pages 11–16)
What This Means (2025 FDD)
According to Boulder Designs' 2025 Franchise Disclosure Document, an audit can impact fees in a couple of ways. First, if an audit reveals an understatement in the amounts due to Boulder Designs of 2% or more, the franchisee is responsible for paying all costs and expenses associated with the audit. These audit expenses are payable upon demand.
Second, late fees apply to any understatement in amounts due that is revealed by an audit. The late fee is $100 per incident and will continue to accrue each month when balances due from previous months carry over into the current month.
These audit-related fees are in addition to the standard fees that Boulder Designs franchisees must pay, such as royalty fees, national accounts fees, and technology fees. Franchisees should ensure they maintain accurate records and make timely payments to avoid triggering an audit and incurring these additional expenses.