What does the Audit Fee for a Cr3 American Exteriors franchise consist of?
Cr3_American_Exteriors Franchise · 2025 FDDAnswer from 2025 FDD Document
| TYPE OF FEE | AMOUNT | DUE DATE (Note 2) | REMARKS |
|---|---|---|---|
| (Note 1) | |||
| Audit Fee | Cost of audit plus 18% interest per annum on underpayment and $50 per month late payment. | As invoiced | Payable if an audit discloses an under reporting of Gross Revenues or underpayment to us by 2% or more. |
Source: Item 6 — OTHER FEES (FDD pages 18–20)
What This Means (2025 FDD)
According to Cr3 American Exteriors's 2025 Franchise Disclosure Document, the Audit Fee is comprised of three potential components. First, it includes the cost of the audit itself, which would likely cover the expenses Cr3 American Exteriors incurs to have its financial records reviewed. Second, if the audit reveals an underreporting of Gross Revenues or an underpayment to Cr3 American Exteriors by 2% or more, the franchisee will also be responsible for paying interest at a rate of 18% per annum on the underpaid amount. Finally, a late payment fee of $50 per month may be assessed if the audit fee is not paid on time.
This fee is invoiced to the franchisee, meaning Cr3 American Exteriors will send a bill detailing the charges. It is important to note that the audit and associated fees are only payable if an audit reveals financial discrepancies meeting the specified threshold. This incentivizes accurate financial reporting by franchisees, as underreporting can lead to significant additional costs.
Franchisors commonly reserve the right to audit franchisees to ensure compliance with financial reporting requirements outlined in the franchise agreement. The specific terms of audit fees, including interest rates and late payment penalties, can vary among franchise systems. Prospective Cr3 American Exteriors franchisees should understand the conditions under which an audit may be triggered and the potential costs associated with it to avoid unexpected expenses.