What is the condition for paying the Inspection and Audit Costs to Engel & Volkers?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Inspection and Audit Costs | You must reimburse us for the cost of inspection or audit, including the charges of our employees, attorneys and accountants, and travel expenses. | On demand | Payable if the inspection or audit shows an underpayment of royalty payments greater than 2%. |
Source: Item 6 — OTHER FEES (FDD pages 22–30)
What This Means (2025 FDD)
According to Engel & Volkers's 2025 Franchise Disclosure Document, franchisees must reimburse Engel & Volkers for inspection or audit costs, including charges for employees, attorneys, accountants, and travel expenses. This reimbursement is due upon demand.
However, this payment is only required if the inspection or audit reveals an underpayment of royalty payments exceeding 2%. This condition provides a threshold that must be met before Engel & Volkers can demand reimbursement for these costs.
This condition is fairly standard in franchising. It protects franchisees from incurring inspection costs unless a significant discrepancy in royalty payments is discovered. Prospective Engel & Volkers franchisees should ensure they maintain accurate financial records to minimize the risk of such an audit and potential cost reimbursement.