Under what condition will a Marble Slab Creamery franchisee be charged for an audit?
Marble_Slab_Creamery Franchise · 2025 FDDAnswer from 2025 FDD Document
transfer | transfer of franchise. |
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Audit (1) | Cost of audit plus interest on unpaid amount of 1.5% interest per month and $25 per week (2) | 30 days after billing | Cost of audit payable only if audit shows an understate |
Source: Item 6 — OTHER FEES (FDD pages 23–32)
What This Means (2025 FDD)
According to Marble Slab Creamery's 2025 Franchise Disclosure Document, a franchisee will be charged for an audit only if the audit reveals an understatement in any payment of at least 2%. The charge will cover the cost of the audit, plus interest on the unpaid amount at a rate of 1.5% per month, along with an additional $25 per week. Payment is due 30 days after billing.
This condition is fairly standard in franchising. Franchisors need to ensure accurate reporting of sales and associated fees like royalties. By setting a threshold of 2% for understatement, Marble Slab Creamery focuses the audit charge on cases where the discrepancy is significant enough to warrant the expense of an audit. This protects franchisees from being penalized for minor accounting errors.
For a prospective Marble Slab Creamery franchisee, this means maintaining accurate financial records is crucial. Implementing robust accounting practices and regularly reconciling financial statements can help avoid unintentional underreporting. If an audit is triggered, franchisees should carefully review the findings and, if necessary, seek professional accounting advice to address any discrepancies promptly. Paying attention to these details can help franchisees avoid the cost of an audit and potential interest and weekly charges.