What are the requirements for Byrider's compliance audits for franchisees?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
s. 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 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 Franchisee fails a Compliance Audit, in the reasonable judgment of the Company, a failure currently meaning a score of less than 80%, Franchisee shall pay to Company a penalty in the amount of $500.00 plus reimbursement of travel, food, and lodging for a second consecutive audit. If Franchisee fails the second consecutive Compliance Audit, Franchisee shall pay to Company a penalty in the amount of $2,500.00 plus reimbursement of travel, food, and lodging for a third consecutive Compliance Audit.
Source: Item 23 — Receipts (FDD pages 88–335)
What This Means (2025 FDD)
According to Byrider's 2025 Franchise Disclosure Document, Byrider may conduct compliance audits on a franchisee's business operations periodically. These audits will review legal and regulatory compliance, marketing practices, and adherence to Byrider, CNAC, and Service Center operational standards.
If a franchisee fails a compliance audit, defined as scoring less than 80% in Byrider's reasonable 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. Should the franchisee fail the second consecutive compliance audit, the penalty increases to $2,500.00, along with reimbursement for travel, food, and lodging for a third consecutive audit.
Failing a third consecutive compliance audit results in a $10,000.00 penalty, and Byrider has the right to terminate the Franchise Agreement. However, Byrider agrees that these penalties will not apply to any deficiencies for the first occurrence if the franchisee cures the issue within five business days of receiving written notice from Byrider.