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Audit & Assurance

5 engagements

Franchise Audit & Royalty Examination.Royalty verification and franchise-compliance audits.

Brief our team

Why this matters

Franchise audits are revenue audits conducted under the franchise agreement's audit clause. Most franchise contracts give the franchisor the right to audit royalty-bearing revenue, usually with a cost-shifting trigger if the under-reporting exceeds a stated threshold (3% to 5% is common). We work for franchisors auditing franchisees and for franchisees responding to a franchisor's audit.

What's inside

5 engagements under Franchise Audit & Royalty Examination, each with a dedicated page. Click any for the full brief.

01

Audit Clause Interpretation

The clause sets the scope, the look-back period, the standard of access, and the cost-shifting rule.

02

Royalty Base Verification

Reported royalty-bearing revenue is reconciled to the franchisee's books, then to the POS or system of record.

03

Marketing-Fund Contribution Verification

Where a separate marketing-fund contribution is calculated on revenue, the same verification applies.

04

Brand-Standard Financial Compliance

Capital-expenditure obligations, refurb cycles, and brand-standard purchases routed through the franchisor's preferred suppliers are checked against the contractual obligation.

05

Under-Reporting Report and Cost Allocation

Findings are reported with the supporting evidence, and the cost-shifting threshold is calculated against the franchise contract's terms.

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