What is the deadline for an Exit franchisee to pay discrepancies identified during an audit?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
EXIT and Subfranchisor shall have the right to inspect and audit all of Franchisee's books, records, and procedures. Franchisee shall permit, and understands that it should expect, regular and frequent inspection at reasonable times, by agents or representatives of EXIT and/or Subfranchisor of all books, records, MLS agent rosters and MLS transaction reports, procedures, and services of Franchisee in order to determine compliance with this Agreement. All discrepancies shall be paid within ten (10) days after the date Franchisee receives notice of such discrepancy. If any underpayment exceeds five percent (5%) of the amount due, then Franchisee shall pay all costs and expenses relating to the audit, including, but not limited to, travel, lodging, meals, attorneys', accountants' and other professional fees. All payments due pursuant to this section shall be subject to the interest charges provided in Section 7.2 above.
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, if an audit reveals discrepancies in payments, the franchisee must remit the outstanding amount within ten days of receiving notice of the discrepancy. This requirement ensures that Exit franchisees maintain accurate financial records and promptly address any underpayments identified during audits.
Furthermore, if the underpayment exceeds 5% of the total amount due, the Exit franchisee is responsible for covering all expenses associated with the audit. These expenses include, but are not limited to, travel, lodging, meals, and professional fees for attorneys, accountants, and other related services. This provision incentivizes franchisees to maintain accurate financial records and make timely payments to avoid incurring additional audit-related costs.
All payments due as a result of the audit are subject to interest charges as outlined in Section 7.2 of the Franchise Agreement. This section likely details the specific interest rates and terms applicable to overdue amounts. It is important for prospective franchisees to review Section 7.2 to fully understand the potential financial implications of late payments or underpayments identified during audits.