What is the due date for the Inspection and Audit Costs owed 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' 2025 Franchise Disclosure Document, franchisees must reimburse Engel & Volkers for inspection and audit costs. These costs include charges for employees, attorneys, and accountants, as well as travel expenses. The due date for these Inspection and Audit Costs is 'On demand.'
This means that Engel & Volkers can request reimbursement for these costs at any time. This is payable if the inspection or audit reveals an underpayment of royalty payments exceeding 2%. This condition highlights the importance of accurate and timely royalty reporting by the franchisee.
For a prospective Engel & Volkers franchisee, this implies a need to maintain meticulous financial records and ensure accurate royalty payments to avoid triggering an audit. The 'on demand' nature of the payment means franchisees should be prepared to cover these potentially substantial costs promptly if an audit is conducted and an underpayment is discovered. This contrasts with some franchise systems that may offer payment plans or extended payment terms for such expenses.