What is included in the Audit Fee for a Cr3 American Exteriors franchise?
Cr3_American_Exteriors Franchise · 2025 FDDAnswer from 2025 FDD Document
non-refundable.
ITEM 6 OTHER FEES
| TYPE OF FEE | AMOUNT | DUE DATE (Note 2) | REMARKS |
|---|---|---|---|
| (Note 1) | |||
| Royalty Fee | The greater of (i) 6.0% of monthly Gross Revenue collected (the “Royalty Fee”) or (ii) $2,000.00 (the “Minimum Royalty Fee”). (Note 3) | By the 10th day of the month. | Royalty Fee’s start the first month in operation; however, the Minimum Monthly Royalty Fee, if applicable, will not begin until the 7th month of operation. Payments are due on |
| TYPE OF FEE | AMOUNT | DUE DATE (Note 2) | REMARKS |
| --- | --- | --- | --- |
| (Note 1) | |||
| Credit Card Processing Fee | Then current rate charged by third- party credit card processor. | At time of charge | You agree to pay a credit card processing fee if you pay any sums to us by credit card, to the extent permitted by law. |
| Insufficient Funds Fee | $50 per transaction. | As incurred | You agree to pay this fee to us if an electronic transfer or other payment from you to us is declined. |
| Interest | Highest applicable legal rate not to exceed 12% per annum on amounts you owe. | As incurred | Applies to all Royalty Fees, Technology Fee, Advertising Fund contributions and any other amounts that are past due for more than 5 days. |
| 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. |
| TYPE OF FEE (Note 1) | AMOUNT | DUE DATE (Note 2) | REMARKS |
| ------------------------------- | -------------------------------------------------------------------------------------------------------- | ------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| Credit Card Processing Fee | Then current rate charged by third party credit card processor. | At time of charge | You agree to pay a credit card processing fee if you pay any sums to us by credit card, to the extent permitted by law. |
| Insufficient Funds Fee | $50 per transaction. | As incurred | You agree to pay this fee to us if an electronic transfer or other payment from you to us is declined. |
| Interest | Highest applicable legal rate not to exceed 12% per annum on amounts you owe. | As incurred | Applies to all Royalty Fees, Technology Fee, Advertising Fund contributions and any other amounts that are past due for more than 5 days. |
| 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 Revenue |
Source: Item 6 — OTHER FEES (FDD pages 18–20)
What This Means (2025 FDD)
According to Cr3 American Exteriors' 2025 Franchise Disclosure Document, the Audit Fee includes the cost of the audit itself, plus 18% interest per annum on any underpayment discovered during the audit, and a $50 per month late payment fee. This fee is invoiced to the franchisee.
The Audit Fee is payable if an audit reveals that the franchisee has under-reported Gross Revenues or has underpaid Cr3 American Exteriors by 2% or more. This condition highlights the importance of accurate financial record-keeping and transparent reporting of revenues to avoid triggering an audit and the associated fees and interest.
Franchisors commonly reserve the right to audit franchisee records to ensure compliance with royalty and other financial obligations. The inclusion of interest on underpayments and late payment fees is also a standard practice to incentivize timely and accurate reporting. Prospective Cr3 American Exteriors franchisees should be aware of these potential costs and ensure they have systems in place to accurately track and report their Gross Revenues.