What constitutes underreporting of Gross Sales or underpayment of royalties that triggers additional penalties for Brueggers Bagels franchisees?
Brueggers_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
We will also have the right, at any time, to have an independent audit made of your books. If an inspection or audit reveals that any payment to us has
- 5.5. Interest and Late Fees. If any sums required to be paid by you to us under this Agreement are not received in full by us when due, we will assess a late fee of one hundred dollars ($100) for each week that any payment is delinquent. In addition, if any payment to us is overdue, you must pay us, in addition to the overdue amount, daily interest on the overdue amount from the date it became overdue until paid, at the rate of one and one-half percent (1.5%) per month or the maximum rate permitted by law, whichever is less. Interest shall be calculated on a daily basis. Interest charges are non-refundable. Such interest shall be in addition to any other remedies we may have. Your failure to have sufficient funds available in the Account to pay any amount then due or your failure to pay all amounts when due, constitutes grounds for termination of the Agreement, as provided in Section 17.3.
Source: Item 22 — CONTRACTS (FDD page 61)
What This Means (2025 FDD)
According to Brueggers Bagels's 2025 Franchise Disclosure Document, if an inspection or audit reveals that any payment to the company has not been made, the franchisee is responsible for the costs of the inspection or audit. Additionally, Brueggers Bagels can charge interest on the underpaid amount.
Specifically, if any sums required to be paid by the franchisee to Brueggers Bagels under the Franchise Agreement are not received in full when due, Brueggers Bagels will assess a late fee of $100 for each week that any payment is delinquent. In addition, if any payment to Brueggers Bagels is overdue, the franchisee must pay Brueggers Bagels, in addition to the overdue amount, daily interest on the overdue amount from the date it became overdue until paid, at the rate of one and one-half percent (1.5%) per month or the maximum rate permitted by law, whichever is less.
Interest shall be calculated on a daily basis, and these interest charges are non-refundable. The failure to have sufficient funds available in the designated account to pay any amount then due or the failure to pay all amounts when due, constitutes grounds for termination of the Agreement.