When is the audit fee due for a Spray Net franchisee?
Spray_Net Franchise · 2025 FDDAnswer from 2025 FDD Document
e.
| Name of Fee | Amount1 | Due Date | Remarks |
|---|---|---|---|
| Roofing Equipment | $20,000 to $30,000 The fees below will only be charged if you fail to comply with the terms of your Franchise Agreement. | Upon choosing to offer Roofing Services within the Territory(ies) | If you choose to offer roofing services, you must purchase approximately $20,000 to $30,000 of applicable equipment from us or our Approved Supplier(s). |
| Audit Fee6 | Actual cost incurred by us. | Immediately after understatement of Gross Sales is determined by our inspection. | If underreporting of sales is determined, you pay the Royalty due plus interest, along with all the costs related to performing the audit. There is no charge for the audit if sales are reported accurately. |
| Non-Reporting Enforcement Fee | We reserve the right to charge you our then-current enforcement fee ("Enforcement Fee") which is currently $500 in connection with each instance where you fail to (a) timely input all prospect and/or client information, contracts and/or other documents into the required business management system software, and/or (b) otherwise underreport or fail to report any Gross Sales, revenue or other information into that software system. | Immediately upon demand after an inspection has been conducted | We charge this enforcement fee specifically to underscore and highlight the importance of the required reporting and data entry you must enter into your business management software as such information becomes available. |
| Delinquency Charges and Interest7 | 18% per year, or higher rate as permitted by applicable law | Immediately after date payment is due. | Charged on all fees and accounts receivable due to us when not paid timely. In addition to this interest, we reserve the right to charge a late fee amounting to $500 in connection with any payment that is late or that we are not able to timely collect via your Payment Account due to insufficient funds at that time. You shall also pay $50 for each check given or electronic transfer made that is dishonored, fa |
Source: Item 6 — > **ITEM 6 OTHER FEES (FDD pages 15–29)
What This Means (2025 FDD)
According to Spray Net's 2025 Franchise Disclosure Document, an audit fee is due immediately after an understatement of Gross Sales is determined by Spray Net's inspection. This fee covers the actual costs incurred by Spray Net to conduct the audit.
Spray Net will only charge this fee if a franchisee has underreported sales. If the audit reveals underreporting, the franchisee is responsible for paying the royalty due, along with interest, and all costs related to performing the audit. The FDD specifies that there is no charge for the audit if sales are reported accurately.
For a prospective Spray Net franchisee, this means maintaining accurate and transparent financial records is crucial. Failure to do so can result in not only the original underpaid royalties and interest but also additional audit fees, which can range from $1,000 to $3,000 or more, depending on the complexity and scope of the audit. Franchisees should ensure their reporting is accurate to avoid these potential costs.