What is the range of previous audit costs for a Spray Net franchise?
Spray_Net Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Audit Costs. Following an audit, if we find you have underreported Gross Sales, you will pay the Royalty Fee and all other past amounts due under the Franchise Agreement due to your underreporting, as well as interest and all our costs associated with conducting the audit. Audit costs vary depending upon where you are located, the condition of your financial records, what we audit and when. Previous audit costs alone range between $1,000 and $3,000 and could be more. There are no audit costs to you if your records, r
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, previous audit costs have ranged from $1,000 to $3,000, but could potentially be higher. This cost is incurred if an audit reveals that a franchisee has underreported their gross sales. In such cases, the franchisee is responsible for paying the royalty fee, any other past due amounts, interest, and all costs associated with the audit.
However, the FDD specifies that if a Spray Net franchisee's records, reports, and payments are in order and current, there will be no audit costs. This provides a clear incentive for franchisees to maintain accurate and up-to-date financial records.
This fee is not uniformly imposed but is conditional based on the accuracy of sales reporting. Franchisees should ensure meticulous record-keeping to avoid potential audit costs and related penalties. This is a fairly standard practice in franchising, where franchisors reserve the right to audit franchisee records to ensure compliance with the franchise agreement and accurate payment of royalties.