What additional costs are incurred by a Byrider franchisee for failing the first compliance audit?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
y deficiencies referred to herein for the first occurrence if said occurrence is cured within five (5) business days upon written notice by the Company to the Franchisee.
- 13.4 Compliance Audits. The Company may from time to time perform compliance audits reviewing operations of
Source: Item 23 — Receipts (FDD pages 88–335)
What This Means (2025 FDD)
According to the 2025 Byrider Franchise Disclosure Document, if a franchisee fails the first compliance audit, they will incur additional costs. Specifically, if the franchisee fails the initial compliance audit, defined as scoring less than 80% in the reasonable judgment of Byrider, the franchisee must pay a penalty of $500.00 to Byrider.
In addition to the $500 penalty, the franchisee is also responsible for reimbursing Byrider's expenses for travel, food, and lodging related to a second, consecutive compliance audit. This means Byrider will conduct another audit to check if the franchisee has corrected the issues identified in the first failed audit.
It is important to note that Byrider may conduct compliance audits to review various aspects of the franchisee's business operations, including legal and regulatory compliance, marketing efforts, and adherence to Byrider, CNAC, and Service Center operational standards. Failing these audits can lead to significant financial penalties and, if failures persist, potential termination of the franchise agreement.