Besides a Non-Compliance Fee and audit costs, what other payment is required if a Dryject franchisee under-reports gross revenues?
Dryject Franchise · 2025 FDDAnswer from 2025 FDD Document
Note 7. Audit. If we audit your business and find that you have under-reported Gross Revenues by 5% or more, or if you fail to properly maintain the insurance requirements outlined in the Agreement, or if you fail to meet the minimum local or national advertising requirements outlined in the Franchise Agreement, or the audit is caused by your failure to provide certain supporting records, etc., to us, then you will be required to pay a Non-Compliance Fee and the cost of the audit. You will also be required to pay interest on past due amounts. (See Note 3 above)
Source: Item 6 — OTHER FEES (FDD pages 14–18)
What This Means (2025 FDD)
According to Dryject's 2025 Franchise Disclosure Document, if Dryject audits a franchisee's business and finds that the franchisee has under-reported gross revenues by 5% or more, the franchisee will be required to pay interest on past due amounts, in addition to a Non-Compliance Fee and the cost of the audit.
The Non-Compliance Fee is $100 per incident plus 1½% interest per month on the unpaid balance or the maximum interest permitted by law if it is lower. In California, the highest interest rate by law is 10% annually.
This policy incentivizes accurate reporting by Dryject franchisees. Underreporting revenues not only affects the royalty and marketing fund contributions but can also trigger additional financial penalties in the form of interest on past due amounts and the cost of an audit. Franchisees should maintain meticulous records and report revenues accurately to avoid these fees.