Under what condition will a Zoomin Groomin franchisee be charged an Audit Fee?
Zoomin_Groomin Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Royalty Fee (Notes 1) | The Royalty Fee rate is 8% on Gross Revenue subject to a minimum Royalty Fee of $125 per week (the "Minimum Weekly Royalty Fee"). | Payable Weekly by electronic funds transfer ("EFT") from your Bank Account. | Revenues from the Franchised Business. |
| Advertising | Advertising Fund Contribution is 2% of previous week's Gross Revenue. | Payable weekly | Local, regional, or national advertising and support to promote the brand. |
| Fund | |||
| Technology Fee (Note 2) | Our then current fee up to $30 per week (presently, $10 per week) | Weekly in the same manner as the Royalty Fee | Payable to us |
| CRM Fee (Note 3) | The then-current fee charged by third party vendor (presently, $69.00 per month) | Payable monthly | Payable to third parties, but we reserve the right to collect this fee from you. |
| Insurance (Note 4) | Varies by state Δs inclirred | Payable to third parties. | |
| Additional | ace $0 As incurred | A fee is only charged if you request non-standard assistance. | |
| Assistance | |||
| (Note 5) | |||
| Late Fees | Lesser of 1% per month or the highest rate allowable by law of the state where you are located. | As incurred | Apply to amounts owed to us that are five (5) days past due. |
| Credit Card | hy third-narty credit card As incurred | Payable if you elect to pay any sums to us by credit card. | |
| Processing Fee | |||
| Transfer Fee (Note 6) | $5,000 | Payable at closing | |
| Third Party | At cost | As incurred | You agree to reimburse us for any third-party charges we incur on your behalf. |
| Charges | |||
| Type of Fee | Amount | Due Date | Remarks |
| Client Refunds | Actual amount incurred | Upon demand | You must pay us any amounts we pay to resolve customer/client concerns or complaints. |
| Audit Fee | Cost of audit plus $50 late fee per month on any late payment | Upon demand | You will pay to us our cost in performing an audit of your Franchise Business plus a Late Fee of $50 per month on any late payment found through such audit if the audit discloses an under reporting of Gross Revenues or underpayment to us by 5% or more. |
Source: Item 6 — OTHER FEES (FDD pages 16–20)
What This Means (2025 FDD)
According to Zoomin Groomin's 2025 Franchise Disclosure Document, a franchisee will be charged an Audit Fee if an audit of their franchise business reveals an underreporting of Gross Revenues or an underpayment to Zoomin Groomin by 5% or more. The Audit Fee will consist of the cost of the audit itself, plus a $50 late fee per month on any late payment identified through the audit. This fee is due upon demand from Zoomin Groomin.
This means that Zoomin Groomin has the right to audit a franchisee's financial records to ensure accurate reporting and payment of fees. If the audit uncovers discrepancies exceeding the 5% threshold, the franchisee becomes responsible for covering the audit expenses and any associated late payment fees. This policy incentivizes franchisees to maintain accurate financial records and promptly remit all required payments to Zoomin Groomin.
For a prospective Zoomin Groomin franchisee, it is crucial to maintain meticulous records of all Gross Revenues and payments made to the franchisor. Implementing robust accounting practices and regularly reconciling financial statements can help prevent unintentional errors that could trigger an audit and the associated fees. Understanding this policy and adhering to the financial reporting requirements outlined in the Franchise Agreement is essential for maintaining a positive relationship with Zoomin Groomin and avoiding unexpected costs.