In relation to inspections and audits, what is the franchisee's obligation regarding the Co-Branded Franchisor's efforts to conduct inspections or audits at Auntie Annes?
Auntie_Annes Franchise · 2024 FDDAnswer from 2024 FDD Document
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 FDD, franchisees are required to provide full cooperation during any inspections or audits conducted by Auntie Annes. This obligation extends to operational audits aimed at determining material compliance with the Franchise Agreement.
The scope of these inspections and audits is broad, encompassing the physical premises, proprietary goods, approved products, and any other products sold at the franchise, regardless of whether they are authorized. Auntie Annes or its agents can take samples, record operations via video or photography, and interview employees, customers, landlords, and suppliers.
Furthermore, Auntie Annes has the right to audit, review, and examine the franchisee's books, records, accounts, and tax returns, including doing so electronically. Franchisees may be required to send copies of these documents within ten days of a request. Franchisees may also have to participate in customer satisfaction surveys or other audit programs to assess compliance with customer service standards. While Auntie Annes typically bears the expense of inspections, franchisees may be charged non-compliance fees and associated costs if the inspection is due to repeated failures to comply with the Franchise Agreement.