Regarding inspections and audits at Auntie Annes, does the franchisee acknowledge that the Co-Branded Franchisor may conduct inspections or audits?
Auntie_Annes Franchise · 2024 FDDAnswer from 2024 FDD Document
14.1 Inspections and Audits. We or any of our authorized agents may at any time during normal business hours (including pre-opening and post-closing) enter the Franchised Business or any other place where business related to the Franchised Business is conducted and: (i) conduct an operational audit to determine your material compliance, as we determine, with this Agreement; (ii) examine, analyze, and inspect the Franchised Business, the Proprietary Goods, the Approved Products, and any products produced and/or sold or distributed at, from, or through the Franchised Business (whether authorized or unauthorized); (iii) take reasonable samples of any the Proprietary Goods, the Approved Products, and any products produced and/or sold or distributed at, from, or through the Franchised Business (whether authorized or unauthorized), without charge or liability; (iv) videotape, photograph, or otherwise record the operation of the Franchised Business; (v) interview your employees, customers, landlords, and suppliers; and (vi) audit, review and examine by any means, including electronically through the use of telecommunications devices or otherwise, at our expense, your books, records, accounts, and tax returns related to the Franchised Business. We may require you to send us copies of your books, records, and files related to the Franchised Business, which you must provide to us or our representatives within a reasonable time (not to exceed 10 days) of our request. We also may require you to participate in customer satisfaction surveys or other audit programs, including electronically through the use of telecommunications devices or otherwise, to assess your compliance with our customer service standards. You will provide us with full cooperation in the course of any inspection or audit we conduct under this Section. Any inspections will be made at our expense, unless the inspection is necessitated by your repeated or continuing failure to comply with any provision of this Agreement, in which case we may charge you non-compliance
Source: Item 22 — CONTRACTS (FDD page 106)
What This Means (2024 FDD)
According to the 2024 Auntie Annes Franchise Disclosure Document, Auntie Annes or their authorized agents have the right to conduct inspections and audits of the Franchised Business. This includes operational audits to ensure compliance with the Franchise Agreement. They can examine the business, products, and take samples. Auntie Annes can also record the business operations, interview employees, customers, landlords, and suppliers, and audit financial records.
Auntie Annes may require franchisees to send copies of their books, records, and files within 10 days of a request. Franchisees may also be required to participate in customer satisfaction surveys or other audit programs to assess compliance with customer service standards. Franchisees must fully cooperate with these inspections and audits.
Typically, Auntie Annes will bear the expense of these inspections unless the inspection is due to the franchisee's repeated failure to comply with the Franchise Agreement. In such cases, Auntie Annes may charge non-compliance fees and costs associated with the inspection, including wages, travel, and living expenses for their representatives.