If a Byrider audit reveals an underpayment exceeding 2% that is deemed intentional or grossly negligent, what penalty might Byrider Franchising Partners impose?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
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 Byrider's 2025 Franchise Disclosure Document, if a Byrider franchisee is found to have underpaid Byrider Franchising Partners by more than 2% due to intentional actions or gross negligence, the franchisee will face significant penalties.
Specifically, the franchisee must promptly pay Byrider Franchising Partners an amount equal to three times the Royalty Fees and/or Advertising Fees that are due. This serves as a substantial financial penalty for non-compliance.
In addition to the tripled fees, the franchisee is also responsible for paying interest on the underpaid amount at the highest rate allowed by law. Furthermore, the franchisee must cover all costs and expenses related to the audit conducted by Byrider Franchising Partners representatives. These costs include salaries, travel costs, room and board, and travel fees incurred by the representatives during the audit process. This comprehensive penalty structure is designed to deter underreporting and ensure accurate payment of fees to Byrider.