What is the definition of 'Our Cost of Audit' according to Expense Reduction Analysts?
Expense_Reduction_Analysts Franchise · 2025 FDDAnswer from 2025 FDD Document
| NAME OF FEE1 | AMOUNT OR FORMULA | DUE DATE | REMARKS |
|---|---|---|---|
| Our Cost of Audit | Our out-of-pocket expense | Upon invoice | You pay our cost of audit only if the audit showed that your Net Cumulative Receipts were understated by 2% or more, or if the audit was necessary because you did not submit required financial reports to us. |
Source: Item 6 — OTHER FEES (FDD pages 13–19)
What This Means (2025 FDD)
According to Expense Reduction Analysts' 2025 Franchise Disclosure Document, 'Our Cost of Audit' is defined as the franchisor's out-of-pocket expenses for conducting an audit of the franchisee's business. This fee is invoiced to the franchisee.
The franchisee is only responsible for paying this cost if the audit reveals that their Net Cumulative Receipts were understated by 2% or more. The franchisee will also be responsible for paying this cost if the audit was necessary because they failed to submit the required financial reports to Expense Reduction Analysts.
This means that Expense Reduction Analysts franchisees must accurately report their revenue and submit all required financial documents to avoid incurring audit costs. Franchisees should maintain meticulous records and ensure timely submission of all required reports to remain compliant and avoid potential audit fees.