When are audit expenses due to Burros Fries?
Burros_Fries Franchise · 2024 FDDAnswer from 2024 FDD Document
| Audit Expenses | Cost of Audit Fees plus interest at 18% per annum (1.5% per month) up to the maximum interest rate allowed by law. | Ten days after receipt of audit report. | Payable to us only if you understate Gross Revenues by 2% or more. We expect the cost to be between $3,500- $6,500 unless your financial records are not well kept. |
Source: Item 6 — OTHER FEES (FDD pages 12–16)
What This Means (2024 FDD)
According to Burros Fries's 2024 Franchise Disclosure Document, audit expenses are due ten days after the franchisee receives the audit report. These expenses cover the cost of audit fees, plus interest which could be as high as 18% per annum (or 1.5% per month), but will not exceed the maximum interest rate allowed by law.
However, a Burros Fries franchisee is only responsible for paying these audit expenses if they understate their Gross Revenues by 2% or more. The FDD estimates that the cost of the audit will likely be between $3,500 and $6,500, assuming the franchisee maintains well-kept financial records.
It is important to note that these audit expenses are payable directly to Burros Fries. This contrasts with other fees, such as POS Support and Laundry Service Fees, which are paid to approved vendors. Franchisees should ensure they understand the conditions under which an audit may be triggered and the importance of accurate financial reporting to avoid these additional costs.