What happens if an audit discovers an overpayment of royalty fees to Crepe De Licious?

According to the 2025 Crepe De Licious Franchise Disclosure Document, if an audit reveals that a franchisee has overpaid royalty fees, Crepe De Licious will either pay the overpayment back to the franchisee or credit the franchisee's account. This provision ensures that franchisees are not unfairly penalized for unintentional calculation errors.

Conversely, the FDD also states that franchisees are responsible for paying any underpayment of royalty fees discovered during an audit. This obligation helps Crepe De Licious maintain accurate financial records and receive the correct royalty payments from its franchisees.

Furthermore, if a Crepe De Licious franchisee fails to fully cooperate with auditors, does not submit required reports, or the audit reveals underpayment of fees by more than two percent (less than 98% paid), the franchisee will be responsible for covering the franchisor's reasonable travel, lodging, meal expenses, and other audit and inspection costs. The franchisee will also be required to pay the understated amount with applicable late fees and interest of one and one-half percent (1.5%) per month on the understatement. Crepe De Licious also retains the right to publish or disclose the results of their inspections and audits. These rights extend for two years after the expiration or termination of the Franchise Agreement or any transfer.