What is the estimated range of audit expenses for a Burros Fries franchise?
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, franchisees may incur audit expenses if they understate gross revenues by 2% or more. The cost of these audit fees, plus interest at 18% per annum (1.5% per month) up to the maximum interest rate allowed by law, is payable to Burros Fries ten days after receipt of the audit report.
The FDD indicates that Burros Fries estimates the cost of an audit to be between $3,500 and $6,500. However, this range may increase if the franchisee's financial records are not well-maintained.
It is important to note that these audit expenses are only payable if the franchisee understates gross revenues by the specified threshold. Maintaining accurate and well-organized financial records is crucial for a Burros Fries franchisee to avoid potentially incurring these audit-related costs.