Under what circumstances does Potbelly Sandwich Works charge an audit fee?
Potbelly_Sandwich_Works Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of fee1 | Amount | Due Date | Remarks |
|---|---|---|---|
| Audit | Cost of inspection or audit (amount of which depends on circumstances and extent of your non- compliance) | 15 days after billing | Due if you do not give us reports, supporting records, or other required information or understate required Royalties or other amounts by more than 2%. |
Source: Item 6 — OTHER FEES (FDD pages 17–24)
What This Means (2025 FDD)
According to Potbelly Sandwich Works's 2025 Franchise Disclosure Document, an audit fee may be charged to franchisees under specific circumstances related to compliance and reporting. The audit fee is levied if a franchisee fails to provide required reports, supporting records, or other necessary information to Potbelly Sandwich Works. Additionally, the fee is applicable if a franchisee understates the required royalties or other amounts owed by more than 2%.
The amount of the audit fee is not fixed; instead, it is based on the cost of the inspection or audit itself, with the specific amount depending on the circumstances and the extent of the franchisee's non-compliance. This means that franchisees who are significantly non-compliant or who fail to provide necessary information may face higher audit fees due to the increased resources required for the audit.
The audit fee is due 15 days after billing, giving the franchisee a short window to remit payment once the fee is assessed. This policy incentivizes franchisees to maintain accurate records and comply with reporting requirements to avoid incurring audit fees. Franchisees should ensure they have robust accounting practices and are transparent in their dealings with Potbelly Sandwich Works to minimize the risk of an audit and associated fees.