What is the monetary penalty for failing the second consecutive Byrider 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 the Franchisee's Business, such as legal regulatory compliance issues, marketing, and adherence to Byrider, CNAC, and Service Center operational standards ("Compliance Audits" or in the singular "Compliance Audit"). If F
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 a second consecutive compliance audit, they will incur a monetary penalty. Specifically, the franchisee is required to pay Byrider $2,500.00. In addition to this penalty, the franchisee must also reimburse Byrider for expenses related to travel, food, and lodging for a third consecutive audit.
Byrider conducts compliance audits to review the franchisee's business operations. These audits cover areas such as legal and regulatory compliance, marketing practices, and adherence to Byrider, CNAC, and Service Center operational standards. A failure is defined as scoring less than 80% on the audit.
It is important to note that Byrider offers a cure period for the first failed audit. The penalties mentioned do not apply to the first occurrence of any deficiencies if the franchisee corrects them within five business days after receiving written notice from Byrider. However, this cure period does not extend to subsequent failures, making it crucial for franchisees to maintain compliance to avoid financial penalties and potential termination of the franchise agreement after three consecutive failed audits.