factual
Does the Boulder Designs Late Fee apply to understatements revealed by an audit?
Boulder_Designs Franchise · 2025 FDDAnswer from 2025 FDD Document
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| Name of Fee | Amount1 | Due Date | Remarks |
|---|---|---|---|
| Royalty Fee2,4 | The greater of: (i) The percentage of Collected Gross Revenue in accordance with the following schedule: 7% of Gross Revenue Or (ii) The minimum monthly Royalty Fee in accordance with the following schedule: Year 1 - $750/month Year 2 - $950/ month Year 3 thru remainder of term $1,500/month | First day of each month | |
| National Accounts Fee3 | 20% of Gross Revenues4 | On or around the first day of each month | |
| Name of Fee | Amount1 | Due Date | Remarks |
| ------------------------------------------- | ----------------------------------------------------------------------------------------------------------- | --------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| Technology Fee5 | Currently $65 per month, but up to $175 per month. We reserve the right to increase each calendar year by an amount not to exceed 10% of the prior year's fee. | Monthly | For the development and use of online and System technology, including but not limited to internet, website, email, intranet/extranet, and communications technologies, some of which may be implemented in the future. |
| Recommended Local Advertising Spend | 10% of Annual Gross Revenues | As invoiced | We highly recommend you spend a minimum of 10% of annual gross revenues on local advertising. After you have begun operations, by the 31st of January of each year, you must furnish us an accurate accounting of your expenditures on local advertising for the preceding one-year period regardless of the amount spent. |
| Marketing Fee | Currently $0 per month | Monthly | We anticipate charging an amount no greater than $200 per month once implemented. We will provide you with prior notice before any increases in the monthly Marketing Fee are imposed. Once this fee is implemented the fee cap will increase each calendar year by an amount not to exceed 10% of the prior year's cap. |
| Late Fees | $100 per incident | 11th day of each month | Applies to all overdue Royalty Fees, and other amounts due to us. Also applies to any understatement in amounts due revealed by an audit. Late fees will continue to accrue each month when balances due from previous months carry over into the current month. |
| Insufficient Funds Fee | $100 per incident | Upon demand | Applies to all non-approved (ACH Debit) or returned payments made by you that do not fund or clear you bank for any reason whatsoever. |
| 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 |
Source: Item 6 — OTHER FEES (FDD pages 11–16)
What This Means (2025 FDD)
According to Boulder Designs' 2025 Franchise Disclosure Document, the late fee does apply to understatements revealed by an audit. Specifically, Boulder Designs charges a $100 late fee per incident.
This late fee is applied to all overdue Royalty Fees and other amounts due to Boulder Designs. Importantly, it also applies to any understatement in amounts due that are revealed by an audit. The late fees will continue to accrue each month if balances due from previous months carry over into the current month.
This means that if an audit uncovers that a franchisee has underreported their gross revenues or other amounts owed to Boulder Designs, they will not only be responsible for the underpaid amount but also a $100 late fee for each month the amount was underpaid. This could potentially add a significant cost on top of the original underpayment, so franchisees must be accurate in their financial reporting to Boulder Designs.
Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only.
It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.