When are audit expenses due for a Caption By Hyatt franchise?
Caption_By_Hyatt Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Audit expenses | Cost of audit | As incurred | Due only if our audit reveals an understatement of 3% or more or if you fail to report on time or willfully underpay amounts |
Source: Item 6 — Other Fees (FDD pages 20–36)
What This Means (2025 FDD)
According to Caption By Hyatt's 2025 Franchise Disclosure Document, audit expenses are due 'as incurred.' This means a Caption By Hyatt franchisee will be responsible for covering the cost of an audit if it reveals a significant understatement of financial reporting.
Specifically, the audit expenses become due if the audit uncovers an understatement of 3% or more in reported figures. Additionally, these expenses are incurred if the franchisee fails to report financial information on time or willfully underpays amounts owed to Caption By Hyatt.
This condition is fairly standard in franchising, as franchisors need to ensure accurate royalty payments and adherence to financial standards. The 'as incurred' term means these costs are not predictable or regularly occurring but rather contingent on specific findings or failures related to financial compliance.