When is the audit fee due for a Casiola franchise?
Casiola Franchise · 2024 FDDAnswer from 2024 FDD Document
| Reporting Non-Compliance | $150 per occurrence | 14 days of invoice | Payable for failure to timely submit Royalty and Activity Reports, and other reports and financial statements as required under Franchise Agreement. |
| Operations Non-Compliance | $500 to $1,000 per occurrence | 14 days of invoice | Payable for failure to comply with operational standards as required under Franchise Agreement, plus inspection and re-inspection costs incurred by us. |
| Payment Non-Compliance | $150 per occurrence | 14 days of invoice | Payable for failure to timely pay, when due, a fee or payment due to us under the Franchise Agreement, plus interest, costs and legal fees. |
| Interest | 18% per annum from due date | On demand | Payable on all overdue amounts, fees, charges, and payments due to us under the Franchise Agreement. Interest rate cannot exceed legal rate allowed by law and may be adjusted to reflect same. |
| NSF Check Fee or Failed Electronic Fund Transfer | 5% of amount or $50, whichever is greater, or maximum fee allowed by law | On demand | Payable if your bank account possesses insufficient funds and/or fails to process a payment or transfer related to a fee due from you to us. |
| Audit | Cost of audit plus expenses | On demand | For costs incurred by us for each financial audit, provided the audit determines underreporting of 2% or greater during any designated period. Includes expenses incurred by us including audit, legal, travel and reasonable accommodations. |
Source: Item 6 — OTHER FEES (FDD pages 12–18)
What This Means (2024 FDD)
According to Casiola's 2024 Franchise Disclosure Document, the audit fee is due 'On demand.' The audit fee covers the costs incurred by Casiola for each financial audit, especially if the audit determines underreporting of 2% or greater during any designated period. This includes expenses incurred by Casiola, such as audit, legal, travel, and reasonable accommodations.
In practical terms, this means that if Casiola conducts a financial audit of a franchisee's business and finds that the franchisee has underreported their revenue by 2% or more, the franchisee will be responsible for covering the cost of the audit. The costs can include not only the direct expenses of the audit itself but also legal fees, travel expenses, and accommodations for the auditors.
This policy incentivizes accurate financial reporting from Casiola franchisees. Franchisees should maintain meticulous records and report their financials accurately to avoid triggering an audit and the associated fees. The 'On demand' payment term means Casiola can request immediate payment upon completion of the audit and determination of underreporting.