When are audit and inspection costs due for a Chicken Guy franchise?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
| TYPE OF FEE(1) | AMOUNT | DUE DATE | REMARKS |
|---|---|---|---|
| Audit and Inspection Costs | Deficiency in royalty fees and advertising contributions, plus interest. | Within ten days after receipt of the audit or inspection report | The interest rate is the same as the interest rate for late payments. If an inspection or audit is made necessary by your failure to furnish reports or supporting records, or to furnish such reports, records or information on a timely basis, or if there is an understatement of Gross Sales of greater than 2%, in addition to the understated royalty fees and advertising contributions, you also must pay the reasonable costs of the audit or inspection. |
Source: Item 6 — OTHER FEES (FDD pages 12–16)
What This Means (2025 FDD)
According to Chicken Guy's 2025 Franchise Disclosure Document, audit and inspection costs are due within ten days after the franchisee receives the audit or inspection report. These costs cover any deficiency in royalty fees and advertising contributions, plus interest.
Chicken Guy may conduct an audit or inspection if a franchisee fails to furnish reports or supporting records on time, or if there is an understatement of Gross Sales exceeding 2%. In such cases, the franchisee is responsible for covering the reasonable costs of the audit or inspection, in addition to paying the understated royalty fees and advertising contributions.
The interest rate applied to these deficiencies is the same rate charged for late payments. This policy incentivizes franchisees to maintain accurate records and submit them promptly to avoid incurring additional expenses and interest charges. Franchisees should ensure they have robust accounting practices in place to accurately track and report Gross Sales and other relevant financial data to Chicken Guy.