Under what condition is a Floors To Go franchisee required to pay for an audit?
Floors_To_Go Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee | Amount | Due Date | Remarks(1) |
|---|---|---|---|
| Audit | Cost of audit plus interest on underpayment | Due When Billed | Payable only if audit shows an understatement of at least 2%.(7) |
- (7) FTG has the right to audit your books and records relating to your commitment to purchase, for each of your Showrooms, $350,000 or 80% of your total floor covering and window treatment purchases, whichever is greater, through the FTG Marketing System during the calendar year following the opening of each such Showroom.
If an inspection discloses a deficiency of two percent (2%) or more, you agree to reimburse FTG for all costs and expenses connected with such audit (including, without limitation, reasonable accounting and attorneys' fees).
Source: Item 6 — OTHER FEES (FDD pages 12–14)
What This Means (2025 FDD)
According to the 2025 Floors To Go Franchise Disclosure Document, a franchisee is required to pay for an audit under specific circumstances related to the accuracy of their financial reporting. The standard 'Audit' fee is the cost of the audit plus interest on any underpayment that is discovered.
Floors To Go will require the franchisee to cover the cost of the audit if the audit reveals an understatement of at least 2%. This means that if the audit determines that the franchisee has underreported their financial figures by 2% or more, they will be responsible for covering the expenses associated with the audit.
Furthermore, Floors To Go has the right to audit a franchisee's books and records relating to their commitment to purchase $350,000 or 80% of their total floor covering and window treatment purchases, whichever is greater, through the FTG Marketing System during the calendar year following the opening of each showroom. If this inspection uncovers a deficiency of 2% or more, the franchisee must reimburse Floors To Go for all costs and expenses connected with the audit, including accounting and attorneys' fees.