Under what condition does Byrider reserve the right to require an audit of a franchisee's financial statements at the franchisee's expense?

According to Byrider's 2025 Franchise Disclosure Document, Byrider reserves the right to require a franchisee to have their financial statements audited by independent Certified Public Accountants at the franchisee's own expense. This condition applies to the complete financial statements for the franchisee's fiscal year, which must include all businesses that operate in conjunction with or in relation to the Byrider business. This includes any ancillary products, reinsurance companies, and real estate companies associated with the franchise.

This means that as a Byrider franchisee, you may be required to bear the cost of an audit if Byrider deems it necessary. The financial statements subject to this potential audit must be prepared in accordance with generally accepted accounting principles (GAAP) applied consistently. This requirement ensures that Byrider can accurately assess the financial health and performance of its franchisees and related businesses.

For a prospective franchisee, this implies a potential additional expense that must be considered when evaluating the financial viability of the franchise. It is important to factor in the cost of a potential audit when projecting expenses. Franchisees should maintain meticulous financial records and ensure compliance with Byrider's reporting requirements to minimize the likelihood of triggering such an audit. Furthermore, understanding the specific circumstances under which Byrider might require an audit is crucial for financial planning and risk management.