When is a Chocolate Bash franchisee required to pay for an audit?
Chocolate_Bash Franchise · 2024 FDDAnswer from 2024 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Our actual costs | Payable only if (1) we audit you because | ||
| you have failed to submit required reports | |||
| or other non-compliance, or (2) the audit | |||
| concludes that you under-reported gross | |||
| sales b |
Source: Item 6 — OTHER FEES (FDD pages 9–13)
What This Means (2024 FDD)
According to Chocolate Bash's 2024 Franchise Disclosure Document, a franchisee may be required to cover the costs of an audit under specific circumstances. These circumstances arise if the franchisee has failed to submit required reports, demonstrates other forms of non-compliance, or if an audit reveals that the franchisee has under-reported gross sales.
This means that Chocolate Bash franchisees must ensure they are diligent in submitting all required reports accurately and on time. They must also maintain accurate records of their gross sales. Failure to do so could trigger an audit, the cost of which would be borne by the franchisee.
It is common practice in franchising for franchisors to reserve the right to audit franchisees to ensure compliance with the franchise agreement and to verify the accuracy of reported sales figures. The FDD does not specify the potential cost of such an audit, so a prospective Chocolate Bash franchisee should inquire about typical audit costs and procedures during their due diligence.