Under what conditions will a Spray Net franchisee NOT be charged audit costs?
Spray_Net Franchise · 2025 FDDAnswer from 2025 FDD Document
-|---|---|---------|--|
-
- 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, a franchisee will not be charged audit costs if their financial records, reports, and payments are in order and current. This means that Spray Net franchisees who maintain accurate and up-to-date records, submit reports on time, and ensure all payments are current will avoid incurring audit costs.
Conversely, if an audit reveals that a Spray Net franchisee has underreported gross sales, they will be responsible for covering the costs associated with the audit. These costs can vary, with previous audit costs ranging from $1,000 to $3,000, and potentially even higher depending on factors such as the franchisee's location and the condition of their financial records. In addition to covering the audit costs, the franchisee would also be required to pay the royalty fee and any other past amounts due under the Franchise Agreement due to the underreporting, along with interest.
This policy incentivizes Spray Net franchisees to maintain accurate and transparent financial records. By ensuring compliance with reporting and payment obligations, franchisees can avoid the financial burden of audit costs and potential penalties associated with underreporting sales. This is a fairly standard practice in franchising, as franchisors need to ensure accurate royalty payments based on sales.