What triggers the Clean Your Dirty Face Audit fee?
Clean_Your_Dirty_Face Franchise · 2025 FDDAnswer from 2025 FDD Document
| NAME OF FEE 1 | AMOUNT | DUE DATE | REMARKS 2 |
|---|---|---|---|
| Audit | (i) Understated amounts and applicable interest, plus (ii) reimbursement of our actual audit fees and related expenses | Within 15 days after receiving the audit report | Due if you fail to furnish any reports we require or understate Gross Sales3 by more than 3%. |
Source: Item 6 — OTHER FEES (FDD pages 11–16)
What This Means (2025 FDD)
According to Clean Your Dirty Face's 2025 Franchise Disclosure Document, the Audit fee is triggered if a franchisee fails to furnish required reports or understates Gross Sales by more than 3%. This fee covers not only the understated amounts and applicable interest but also the reimbursement of Clean Your Dirty Face's actual audit fees and related expenses.
For a prospective Clean Your Dirty Face franchisee, this means accurate and timely reporting of Gross Sales is critical. Failure to do so can result in a financial audit, with the franchisee bearing the costs of the audit itself, in addition to paying the understated amounts and interest. The 3% threshold provides a small margin of error, but consistent and accurate reporting is essential to avoid triggering this fee.
Franchisors commonly include audit rights and associated fees in their franchise agreements to ensure accurate financial reporting and compliance. The specific thresholds and costs can vary, so it's important for franchisees to understand these terms. Clean Your Dirty Face requires the franchisee to cover all costs associated with the audit if the underreporting exceeds the 3% threshold, which is a fairly standard practice in franchising.