When are audit expenses for Burros Fries payable after receipt of the audit report?
Burros_Fries Franchise · 2024 FDDAnswer from 2024 FDD Document
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| 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 is calculated at 18% per annum (or 1.5% per month), up to the maximum interest rate allowed by law.
However, a Burros Fries franchisee is only responsible for paying these audit expenses if they have understated their Gross Revenues by 2% or more. The FDD estimates that the cost of the audit will likely fall between $3,500 and $6,500. This range is conditional, as the cost may be higher if the franchisee's financial records are not well-maintained.
It is important for prospective Burros Fries franchisees to maintain accurate and organized financial records to avoid triggering an audit and potentially incurring these expenses. Franchisees should also be aware of the interest charges that could apply if payment is not made within the ten-day window after receiving the audit report.