Under what conditions are Expense Reduction Analysts franchisees required to pay audit fees?
Expense_Reduction_Analysts Franchise · 2025 FDDAnswer from 2025 FDD Document
| NAME OF FEE1 | AMOUNT OR FORMULA | DUE DATE | REMARKS |
|---|---|---|---|
| Audit Fees | Actual cost of audit | Within 30 days of invoice | Payable if audit reveals that you have underreported the Gross Revenue of your Consulting Business by 2% or more. |
Source: Item 6 — OTHER FEES (FDD pages 13–19)
What This Means (2025 FDD)
According to Expense Reduction Analysts' 2025 Franchise Disclosure Document, franchisees are required to cover the costs of an audit under specific circumstances. Expense Reduction Analysts will invoice the franchisee for the out-of-pocket expenses incurred during an audit.
Specifically, the franchisee is responsible for these audit costs if the audit reveals that the franchisee has understated their Net Cumulative Receipts by 2% or more. This condition serves as a financial control measure, ensuring accurate reporting of revenue by franchisees.
Additionally, Expense Reduction Analysts may require the franchisee to pay for the audit if the franchisee fails to submit the necessary financial reports. This requirement ensures that franchisees comply with reporting standards, allowing Expense Reduction Analysts to maintain accurate financial oversight. The audit fees are due upon invoicing.