Under what conditions will a Hck Hot Chicken franchisee be required to pay Audit Expenses?

Question

Accepted Answer

|  | Amount | Due Date | Remarks |
|---|---|---|---|
| (Note 1) |  |  |  |
|  |  |  |  |
| Food Safety or Other Inspection Field Revisit | Cost of inspection plus $850 for the first offense and $2,500 for any additional offense | Before re- inspection | If you fail a food safety audit or other inspection, we will require you to undergo an additional audit or inspection. You will pay us directly upon invoicing. This fee is uniformly imposed and is not refundable under any circumstances. |
| Supplier and | Costs of inspection | As incurred | We may charge a fee if we inspect a new |
| Product Evaluation |  |  | product, service or proposed supplier |
| Fee |  |  | nominated by you. |
| Unauthorized Advertising Fee | $500 per occurrence | Upon demand | This fee is payable to the Brand Fund, if you use unauthorized advertising in violation of the terms of the Franchise Agreement. |
| Customer Issue Resolution | Reasonable costs we incur for responding to a customer complaint. | On invoice | Payable if a customer of your HCK Hot Chicken Restaurant contacts us with a complaint and we provide a gift card, refund, or other value to the customer as part of our addressing the issue. |
| Payment Service Fee | Up to 4% of total charge | As incurred | If payment is made to us or our affiliate by credit card for any fee required, we may charge a service charge of up to 4% of the total charge. |
| Late Fee | $100 per occurrence, plus the lesser of the daily equivalent of 12% per year simple interest or the highest rate allowed by law (“Interest”) | As incurred | Payable if any payment due to us or our affiliates is not made by the due date. Interest accrues from the original due date until payment is received in full. |
| Non-Sufficient Funds Fee | The lesser of $100 per occurrence, or the highest amount allowed by law | As incurred | Payable if any check or EFT payment is not successful due to insufficient funds, stop payment, or any similar event. |
| Failure to Submit Required Report Fee | $100 per occurrence and $100 per week | Your bank account will be debited for failure to submit any requested report within five days of request | Payable if you fail to submit any required report or financial statement when due. Fines collected are paid to the Brand Fund. You will continue to incur this fee until you submit the required report. |
| Audit Expenses | Cost of audit and inspection, any understated amounts, plus Interest, and any related accounting and legal expenses | On demand | You will be required to pay this if an audit reveals that you understated your weekly Gross Sales by more than 2% or you fail to submit required reports. |

Source: Item 6 — OTHER FEES (FDD pages 13–19)

Under what conditions will a Hck Hot Chicken franchisee be required to pay Audit Expenses?

Answer from 2025 FDD Document

What This Means (2025 FDD)

	Amount	Due Date	Remarks
(Note 1)

Food Safety or Other Inspection Field Revisit	Cost of inspection plus $850 for the first offense and $2,500 for any additional offense	Before re- inspection	If you fail a food safety audit or other inspection, we will require you to undergo an additional audit or inspection. You will pay us directly upon invoicing. This fee is uniformly imposed and is not refundable under any circumstances.
Supplier and	Costs of inspection	As incurred	We may charge a fee if we inspect a new
Product Evaluation			product, service or proposed supplier
Fee			nominated by you.
Unauthorized Advertising Fee	$500 per occurrence	Upon demand	This fee is payable to the Brand Fund, if you use unauthorized advertising in violation of the terms of the Franchise Agreement.
Customer Issue Resolution	Reasonable costs we incur for responding to a customer complaint.	On invoice	Payable if a customer of your HCK Hot Chicken Restaurant contacts us with a complaint and we provide a gift card, refund, or other value to the customer as part of our addressing the issue.
Payment Service Fee	Up to 4% of total charge	As incurred	If payment is made to us or our affiliate by credit card for any fee required, we may charge a service charge of up to 4% of the total charge.
Late Fee	$100 per occurrence, plus the lesser of the daily equivalent of 12% per year simple interest or the highest rate allowed by law (“Interest”)	As incurred	Payable if any payment due to us or our affiliates is not made by the due date. Interest accrues from the original due date until payment is received in full.
Non-Sufficient Funds Fee	The lesser of $100 per occurrence, or the highest amount allowed by law	As incurred	Payable if any check or EFT payment is not successful due to insufficient funds, stop payment, or any similar event.
Failure to Submit Required Report Fee	$100 per occurrence and $100 per week	Your bank account will be debited for failure to submit any requested report within five days of request	Payable if you fail to submit any required report or financial statement when due. Fines collected are paid to the Brand Fund. You will continue to incur this fee until you submit the required report.
Audit Expenses	Cost of audit and inspection, any understated amounts, plus Interest, and any related accounting and legal expenses	On demand	You will be required to pay this if an audit reveals that you understated your weekly Gross Sales by more than 2% or you fail to submit required reports.