What is the monetary penalty for failing the first Byrider compliance audit?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
al to three (3) times the Royalty Fee and/or Advertising Fee shown to be due and all costs and expenses incurred by the Company in conducting such audit, including salaries of the Company's representatives, travel costs, room and board and audit fees. Nothing contained herein shall constitute an agreement by the Company to accept any payments after the same are due or a commitment by the Company to extend credit to or otherwise finance the Franchisee's operation of the Franchisee's Business. The Company agrees that the penalties referred to herein shall not apply to any 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 Byrider's 2025 Franchise Disclosure Document, if a franchisee fails their first compliance audit, which Byrider defines as scoring less than 80%, Byrider may not immediately impose a monetary penalty. Byrider will provide written notice of the deficiencies, and the franchisee has five business days to correct them.
However, if the franchisee fails a Compliance Audit (scoring less than 80% in Byrider's judgment), the franchisee must pay Byrider a penalty of $500.00, as well as reimburse Byrider for travel, food, and lodging expenses for a second, consecutive audit. This implies that the initial failure does not trigger the penalty if cured within the given timeframe.
This policy encourages franchisees to maintain operational standards and address any shortcomings promptly. The financial penalty and the obligation to cover the costs of a follow-up audit serve as an incentive for franchisees to improve their compliance and operational performance. Failing to address the issues can lead to further financial penalties and, ultimately, termination of the franchise agreement.