What is the daily fee Buona charges if a franchisee fails to comply with an audit request?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
is cured, that Franchisee makes any unauthorized use of the Marks in any manner or in any media, including but not limited to signage, menus, advertising, social media or other internet use, and including during the term of this Agreement, or subsequent to its expiration or termination for any reason.
- h. Failure to Comply with Audit. Franchisee shall pay Franchisor a fee of One Thousand Dollars ($1,000) per day, for each and every day, beginning with the first day up through and including the day the default is completely cured, that Franchisee fails to provide all the information, records, and documents that Franchisor requests in connection with an audit of Franchisee's Franchised Business under Section 4.7.
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, if a franchisee fails to provide all information, records, and documents requested for an audit, or refuses entry to Buona's representative for an inspection, Buona will charge a fee. This fee amounts to $1,000 per day for each day the franchisee remains non-compliant.
This daily fee starts from the first day of non-compliance and continues until the franchisee fully rectifies the issue. This means the franchisee must provide all requested information, records, and documents or allow entry for inspection to stop the accrual of the $1,000 daily fee.
It's important to note that the imposition of this fee does not prevent Buona from pursuing other remedies available under the Franchise Agreement or applicable law. Therefore, in addition to the daily fee, Buona may take further actions to address the franchisee's non-compliance.
This type of penalty for non-compliance with audits is relatively common in franchising, as franchisors need to ensure brand standards and financial accuracy across all locations. Franchisees should maintain organized records and be prepared to comply with audit requests promptly to avoid incurring such fees and potential further action from Buona.