When is the audit fee for a Carbones Pizzeria franchise due?
Carbones_Pizzeria Franchise · 2025 FDDAnswer from 2025 FDD Document
| (Column 1) Type of Fee1 | (Column 2) Amount | (Column 3) Due Date | (Column 4) Remarks |
|---|---|---|---|
| Audit | Cost of audit plus 1.5% interest per month on underpayment from date initially due. | Upon billing | Payable only if audit shows an understatement of at least 2% of Gross Sales for any month. |
Source: Item 6 — OTHER FEES (FDD pages 8–10)
What This Means (2025 FDD)
According to Carbones Pizzeria's 2025 Franchise Disclosure Document, the audit fee is due upon billing. This fee is only payable if an audit reveals that the franchisee understated gross sales by at least 2% for any given month. In addition to the cost of the audit, the franchisee will also have to pay 1.5% interest per month on the underpayment, calculated from the date the payment was initially due.
Franchisors often reserve the right to audit a franchisee's financial records to ensure accurate reporting of gross sales, which directly impacts royalty payments. The threshold of a 2% understatement before triggering the audit fee is a detail prospective Carbones Pizzeria franchisees should note. This means minor discrepancies may not result in additional charges beyond the underpaid amount.
The 1.5% monthly interest charge on underpayments is a fairly standard penalty in franchising. Franchisees should maintain meticulous records and diligently report sales figures to avoid triggering an audit and incurring these additional costs. It is important to note that the audit fee covers not only the cost of the audit itself but also includes interest on any underpayment, making accurate reporting crucial for managing expenses as a Carbones Pizzeria franchisee.