Under what conditions would a Crepe De Licious franchisee be required to pay audit expenses?
Crepe_De_Licious Franchise · 2025 FDDAnswer from 2025 FDD Document
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| Name of Fee(1) | Amount | Due Date | Remarks |
|---|---|---|---|
| Insufficient Funds Fee | $100 per occurrence | As incurred | Payable if any check or EFT payment is not successful due to insufficient funds, stop payment, or any similar event. |
| Audit Expenses | Cost of audit and inspection, any understated amounts, and any related accounting and legal expenses | On demand | You will be required to pay this if an audit reveals that you understated monthly Gross Revenues by more than two percent (2%), or you fail to submit require |
Source: Item 6 — OTHER FEES (FDD pages 12–18)
What This Means (2025 FDD)
According to Crepe De Licious's 2025 Franchise Disclosure Document, a franchisee may be responsible for covering audit expenses under specific circumstances. If a Crepe De Licious franchisee's audit reveals that they have understated their monthly Gross Revenues by more than two percent (2%), they will be required to pay the cost of the audit and inspection. Additionally, they must cover any understated amounts that the audit reveals, along with any related accounting and legal expenses.
Furthermore, a Crepe De Licious franchisee will also be responsible for audit expenses if they fail to submit required reports to the franchisor. This condition underscores the importance of accurate and timely financial reporting to Crepe De Licious.
These audit-related expenses are payable to Crepe De Licious on demand, meaning the franchisee must promptly remit the required amounts upon receiving notice. This policy incentivizes franchisees to maintain accurate financial records and adhere to reporting requirements, as discrepancies or omissions can lead to additional financial burdens beyond regular franchise fees.