Under what conditions does Crave charge an audit fee?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
| (1) | (2) | (3) | (4) |
|---|---|---|---|
| Fees (1) | Amount | Due Date | Remarks |
| Interest | 18% per annum or the highest interest rate allowed by applicable law, whichever is greater | On demand | Interest may be charged on all overdue amounts. Interest accrues from the original due date until payment is received in full. |
| Audit Fee | Cost of audit (estimated to be between $1,000 and $5,000) | When billed | Payable only if we find, after an audit, that you have understated Gross Sales by 2% or more or you have understated any amount you owe to us. You must also pay the |
Source: Item 6 — OTHER FEES (FDD pages 12–19)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, an audit fee is charged under specific circumstances related to the accuracy of reported Gross Sales and other amounts owed to Crave. If an audit reveals that a franchisee has understated Gross Sales by 2% or more, or has understated any amount owed to Crave, the franchisee will be responsible for covering the cost of the audit.
The cost of the audit is estimated to be between $1,000 and $5,000. This fee is in addition to paying the understated amount plus interest. This policy incentivizes franchisees to maintain accurate financial records and report sales and other financial obligations transparently.
Franchisors commonly reserve the right to audit franchisee records, but the specific threshold that triggers an audit fee (2% understatement in Crave's case) can vary. Prospective Crave franchisees should understand that maintaining meticulous records and transparent reporting practices is essential to avoid these fees and potential financial penalties.