What happens if a Byrider franchisee is not in compliance with all Franchise Agreements regarding the Ultra2 Royalty Fee?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
- 9/ If an audit shows no discrepancy, Byrider Franchising Partners pays the cost of the audit. If discrepancy is shown, you pay the cost of the audit. You also immediately pay Byrider Franchising Partners the amount owed plus interest at the highest rate allowed by law. If the discrepancy shows that you underpaid Byrider Franchising Partners by more than 2%, and Byrider Franchising Partners concludes that the under payment was intentional or grossly negligent, you promptly pay Byrider Franchising Partners an amount equal to 3 times the Royalty Fees and/or the Advertising Fees that are due, as well as interest at the highest rate allowed by law and all costs and expenses related to the audit by Byrider Franchising Partners representatives including salaries, travel costs, room and board and travel fees.
Source: Item 6 — Other Fees (FDD pages 21–32)
What This Means (2025 FDD)
According to the 2025 Byrider Franchise Disclosure Document, specific penalties for non-compliance with the Ultra2 Royalty Fee are not explicitly detailed within the provided excerpts. However, the document does outline general consequences for underpayment of fees discovered during an audit. If an audit reveals a discrepancy, the franchisee is responsible for covering the audit costs. Additionally, the franchisee must immediately remit the owed amount, along with interest calculated at the highest legally permissible rate.
Furthermore, if the audit uncovers an underpayment exceeding 2%, and Byrider concludes that the underpayment stemmed from intentional actions or gross negligence, the franchisee will be required to pay a sum equal to three times the unpaid Royalty Fees and/or Advertising Fees. This payment is in addition to interest at the highest rate allowed by law and all expenses associated with the audit, including salaries, travel costs, and accommodation for Byrider representatives.
While the FDD excerpts do not specifically address non-compliance solely related to the Ultra2 Royalty Fee, the general policies regarding underpayment of fees would likely apply. A prospective franchisee should seek clarification from Byrider regarding the specific ramifications of failing to meet the obligations of the Ultra2 Royalty Fee, as these are not explicitly detailed in the provided excerpts. Understanding these specific consequences is crucial for assessing the financial risks associated with the franchise.