What information is excluded from the reporting requirements for an Aw franchisee?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
Such reporting shall not include any records for information relating to your employees, as you exclusively control your labor relations and employment practices.
- 13.3 Our Right to Audit.
We have the right at any time during business hours, and without advance notice to you, to inspect and audit, or cause to be inspected and audited, the business records, bookkeeping and accounting records, sales and income tax records and returns and other records of the Papa Ray's Pizza Restaurant and the books and records of any entity which is the franchisee hereunder.
For purposes of this inspection and audit, records and reports exclude your employment records for your employees.
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, franchisees are not required to include records or information relating to their employees in their reporting to the company. This exclusion applies both to regular reporting requirements and during inspections or audits conducted by Aw. The FDD specifies that franchisees exclusively control their labor relations and employment practices, which explains why this information is not part of the required financial disclosures.
This means that Aw franchisees maintain autonomy over their employee management and are not obligated to share sensitive employee data with the franchisor. This is a fairly standard practice in franchising, as franchisors generally do not want to be involved in the day-to-day management of a franchisee's employees. However, Aw franchisees are still required to provide other financial reports, including weekly gross sales reports, monthly and annual profit and loss statements, balance sheets, and copies of sales and income tax returns.
While employee records are excluded from regular reporting, Aw retains the right to inspect and audit a franchisee's business records, bookkeeping, accounting records, and tax records to ensure compliance with the franchise agreement. If an audit reveals understated gross revenue, the franchisee must pay the owed marketing contributions plus interest. Furthermore, franchisees may be responsible for covering the costs of the audit if it was necessitated by their failure to provide timely and accurate reports or if the understatement of gross revenue exceeds 2%.