Under what financial threshold of under-reported Gross Revenues will Dryject require a Non-Compliance Fee and audit cost payment?
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 discovers that the franchisee has under-reported Gross Revenues by 5% or more, Dryject will require the franchisee to pay a Non-Compliance Fee and cover the cost of the audit. Franchisees will also be required to pay interest on past due amounts.
This policy means that Dryject franchisees must maintain accurate financial records and report their Gross Revenues honestly. Underreporting income, even unintentionally, can lead to significant financial penalties beyond simply paying the owed royalties. The Non-Compliance Fee and audit costs add an extra layer of expense.
It is important for prospective Dryject franchisees to understand this policy and ensure they have systems in place to accurately track and report their Gross Revenues. They should also clarify with Dryject what specific documentation is required to support their revenue reporting to avoid triggering an audit due to insufficient records. This level of scrutiny is fairly standard in franchising to protect the brand's revenue stream and ensure fair royalty payments across all franchisees.