What specific costs are included in the audit costs that a Dq Treat franchisee must pay?
Dq_Treat Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee | Amount(1) P | Due Date(5) P | Remarks |
|---|---|---|---|
| Audit and Recordkeeping Costs | Your contractual percentage continuing license fees and percentage sales promotion program fees times the amount of understated Gross Sales, plus any other amounts owed to us | After audit revealing understatement of Gross Sales by 3% or more | If an initial evaluation or audit reveals an understatement of Gross Sales by 3% or more, you must pay all costs for the audit, including salaries, outside accountant and attorneys’ fees, copying costs, postage, travel, meals, and lodging (“audit costs”), plus audit costs for any additional audits within 2 years after the initial evaluation or audit. |
Source: Item 6 — Other Fees (FDD pages 20–24)
What This Means (2025 FDD)
According to Dq Treat's 2025 Franchise Disclosure Document, if an audit reveals that a franchisee has understated their Gross Sales by 3% or more, the franchisee is responsible for covering the costs of the audit. These audit costs include specific expenses incurred during the audit process.
The costs that the Dq Treat franchisee would be responsible for include salaries of the auditors, fees for outside accountants and attorneys involved in the audit, and any copying costs incurred to produce documentation. Additionally, the franchisee must pay for postage, travel expenses, meals, and lodging for the auditors during the audit process.
Furthermore, the Dq Treat franchisee is also responsible for audit costs for any additional audits conducted within 2 years after the initial evaluation or audit if the initial audit reveals an understatement of Gross Sales by 3% or more. This highlights the importance of accurate record-keeping and reporting of gross sales to avoid incurring these potentially significant audit-related expenses.