What is the maximum amount Face Foundrie can charge a franchisee for audit expenses?
Face_Foundrie Franchise · 2025 FDDAnswer from 2025 FDD Document
w products or inspecting new suppliers you recommend. See Note 7. | | Type of Fee | Amount | Due Date | Remarks (See Note 1) | | |-----------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--| | AUDIT EXPENSES | The actual cost of the audit, which will vary under the circumstances. | Upon demand. | Due if audit of your books shows an understatement of your total amount owed to us for any reporting period of 2% or more, or if the audit is needed because you failed to follow our reporting requirements.
Source: Item 6 — OTHER FEES (FDD pages 15–22)
What This Means (2025 FDD)
According to Face Foundrie's 2025 Franchise Disclosure Document, the amount a franchisee may be charged for audit expenses is based on the actual cost of the audit. This cost can vary depending on the circumstances of the audit.
Specifically, Face Foundrie will only charge a franchisee for audit expenses if an audit of their records reveals an understatement of 2% or more of the total amount owed to Face Foundrie during the audit period, or if the audit is needed because the franchisee failed to follow Face Foundrie's reporting requirements. If triggered, the franchisee must reimburse Face Foundrie for the actual costs incurred during the audit. These costs include travel, lodging, meals, and compensation for the auditing personnel who travel to the Facial Bar.
The actual cost of the audit will depend on factors such as the condition and accuracy of the franchisee's recordkeeping, the extent of their cooperation, the number of years of accounting records reviewed, and other unique circumstances. While Face Foundrie is unable to estimate a range for these audit costs due to the variability of these factors, the FDD states that audit expenses will not exceed Face Foundrie's actual costs.