Who determines the amount of audit costs that an Engineering For Kids franchisee must reimburse?
Engineering_For_Kids Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Audit. If an inspection or audit of your books and records and/or operations reveals that any payments due to us have been understated in any report, then you must pay us on demand the understated amount plus interest from the date this amount was due until paid. If an inspection or audit discloses an understatement of 2% or more for any given month, or that you were offering unapproved programs or using unapproved curriculum, then you must also reimburse us for all costs and expenses, including accounting and attorney's fees, connected with the inspection or audit. The amount of audit costs will be determined by the auditors, legal advisors and other professionals who provide the audit services. These costs will vary based on the fees charged by these professionals, travel
costs, the scope of the audit needed, the degree to which you cooperate in terms of providing information, the time it takes the auditors to review your records, and inflation.
Source: Item 6 — OTHER FEES (FDD pages 10–15)
What This Means (2025 FDD)
According to the 2025 Engineering For Kids Franchise Disclosure Document, the auditors, legal advisors, and other professionals providing audit services determine the amount of audit costs a franchisee must reimburse. These costs can fluctuate based on several factors. These factors include the fees charged by the professionals, travel costs, the scope of the audit, the level of cooperation from the franchisee in providing information, the time it takes to review records, and inflation.
Engineering For Kids will conduct an audit if they suspect that the franchisee has understated payments due to them. If the audit reveals an understatement of 2% or more for any given month, or that the franchisee was offering unapproved programs or using unapproved curriculum, the franchisee is responsible for reimbursing all costs and expenses associated with the audit. These costs encompass accounting and attorney's fees.
This means that an Engineering For Kids franchisee could face significant and unpredictable expenses if their books are not accurate or if they deviate from approved programs. Franchisees should maintain meticulous records and adhere strictly to Engineering For Kids's operational guidelines to avoid triggering an audit and the associated costs. It is common practice in franchising for franchisors to reserve the right to audit franchisee records, with the franchisee bearing the cost if discrepancies are found.