Under what conditions will a Checkers franchisee be charged an audit fee?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
assistance you request. |
| TYPE OF FEE | AMOUNT | DUE DATE | REMARKS (See Note 1) |
|---|---|---|---|
| Fees to Evaluate and Approve Alternative Suppliers | Currently, only out-of-pocket expenses. | Upon receipt of our bill. | We may impose reasonable inspections and supervision fees to cover our costs in evaluating alternative approved brands or suppliers you suggest. |
| Extension Fee | $5,000 | As incurred. | You will pay this amount if we grant you a one-time extension to either locate, secure or develop a site acceptable to us for the Franchised Restaurant. |
| Rent | Varies by site being sublet | Monthly | You will only pay this amount if we sublease the Premises of your Franchised Restaurant to you. If we sublease the Premises, you may pay rent directly to the landlord or to us. If you pay rent to us, we may charge an amount that is higher than the rent due under the underlying lease. |
| Audit | Cost of audit | Upon receipt of our bill. | Payable only if you fail to furnish required information or if we find an understatement of Net Sales greater than 2%. |
| Insurance | Varies, cost of coverage obtained | As incurred | If you fail to obtain the required insurance coverage for the Franchised Restaurant, we may obtain such coverage at your expense. |
| Maintenance Costs | Varies, actual costs | As incurred | If you fail or refuse to maintain the Franchised Restaurant as required, we have |
Source: Item 6 — OTHER FEES (FDD pages 21–30)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, a franchisee will be charged for the cost of an audit under specific circumstances. Checkers will bill the franchisee for an audit if the franchisee fails to furnish required information or if an audit reveals an understatement of Net Sales greater than 2%.
This means that Checkers franchisees must maintain accurate and transparent financial records. Failure to provide necessary financial information when requested or significant discrepancies in reported sales figures can trigger an audit at the franchisee's expense. The cost of the audit is not a fixed fee but will depend on the actual expenses incurred during the auditing process.
For a prospective Checkers franchisee, this highlights the importance of diligent record-keeping and accurate financial reporting. Franchisees should ensure they have systems in place to track sales and expenses accurately and to provide requested information promptly to avoid potential audit fees. This policy is fairly standard in the franchise industry, as franchisors need to ensure brand-wide financial integrity and compliance with the franchise agreement.