What costs am I responsible for if I have to reimburse Golden Krust Caribbean Restaurant for an audit?
Golden_Krust_Caribbean_Restaurant Franchise · 2024 FDDAnswer from 2024 FDD Document
We have the right at any time during your business hours, and without prior notice to you, to inspect and audit, or cause to be inspected and audited, your (if you are a corporation, limited liability company or partnership) and the Restaurant's business, bookkeeping and accounting records, sales and income tax records and returns and other records. You agree to cooperate fully with our representatives and independent accountants we hire to conduct any such inspection or audit. In the event such inspection or audit is made necessary by your failure to furnish reports, supporting records or other information as herein required, or to furnish such items on a timely basis, or in the further event that the audit reveals that you have understated Gross Sales by two percent (2%) or more, you agree to reimburse us for the cost of such inspection or audit, including, without limitation, the charges of attorneys and independent accountants and the travel expenses, room and board and compensation of our employees. The foregoing remedies are in addition to our other remedies and rights under this Agreement and applicable law.
Source: Item 22 — CONTRACTS (FDD page 35)
What This Means (2024 FDD)
According to Golden Krust Caribbean Restaurant's 2024 Franchise Disclosure Document, as a franchisee, you may be required to reimburse Golden Krust for the cost of an inspection or audit under specific circumstances. This reimbursement would be necessary if the audit is triggered by your failure to provide required reports, supporting records, or other information in a timely manner.
Additionally, if an audit reveals that you have understated your Gross Sales by two percent (2%) or more, you will be responsible for covering the expenses associated with the audit. These costs include, but are not limited to, charges from attorneys and independent accountants involved in the audit process.
Furthermore, you would also need to cover travel expenses, room and board, and compensation for Golden Krust Caribbean Restaurant employees involved in the inspection or audit. These financial responsibilities are in addition to any other remedies or rights that Golden Krust Caribbean Restaurant has under the Franchise Agreement or applicable law.