Under what conditions will a Deka Lash franchisee reimburse audit costs?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
We may audit your reports, books, statements, business records, cash control devices, and tax returns at any time during normal business hours.
Audits will be conducted at our expense unless you understate the Gross Revenue for any reported period or period by more than 2% or if you fail to deliver any required report.
In the event of an understatement or failure to deliver, you will reimburse us for all audit costs.
These will include, among other things, the charges of any independent accountant and the travel expenses, room, board, and compensation of our employees incurred in connection with the audit.
You will immediately pay all Royalty Fees, Brand Development Fees, late payment charges and interest on funds that the audit determines are owed.
Our right to audit will include the right to examine the books, tax returns and records of you and other
Source: Item 23 — RECEIPT (FDD pages 63–234)
What This Means (2024 FDD)
According to the 2024 Deka Lash Franchise Disclosure Document, Deka Lash may audit a franchisee's reports, books, statements, business records, cash control devices, and tax returns at any time during normal business hours. Generally, these audits are conducted at Deka Lash's expense.
A Deka Lash franchisee will be required to reimburse Deka Lash for all audit costs if they either understate gross revenue for any reported period by more than 2% or if they fail to deliver any required report. These costs that the franchisee must reimburse include charges from any independent accountant, as well as travel expenses, room, board, and compensation for Deka Lash employees incurred during the audit.
In addition to reimbursing audit costs, the Deka Lash franchisee must immediately pay all Royalty Fees, Brand Development Fees, late payment charges, and interest on funds that the audit determines are owed. Deka Lash's right to audit extends to examining the books, tax returns, and records of the franchisee and other businesses they own or operate to ensure all revenue is properly reported and that appropriate fees and contributions have been paid. This provision ensures Deka Lash can verify the accuracy of financial reporting and compliance with the franchise agreement.