Can Aw inspect the books and records of any entity that is an Aw franchisee?

According to Aw's 2025 Franchise Disclosure Document, Aw has the right to inspect the books and records of any entity that is an Aw franchisee. Specifically, Aw can inspect and audit the business records, bookkeeping and accounting records, sales and income tax records and returns, and other records of the Papa Ray's Pizza Restaurant, as well as the books and records of any entity that is the franchisee. This inspection can occur at any time during business hours and without advance notice to the franchisee. However, the records and reports excluded from this inspection and audit are the franchisee's employment records for their employees.

This provision allows Aw to monitor the financial performance and compliance of its franchisees. It ensures that franchisees are accurately reporting their gross sales and adhering to the financial and operational standards set by Aw. The right to audit without notice gives Aw the ability to verify the accuracy of reported financial data and identify any discrepancies promptly.

For a prospective Aw franchisee, this means they must maintain accurate and up-to-date financial records and be prepared for unannounced audits by Aw. Franchisees should ensure their bookkeeping and accounting practices are sound and transparent. While Aw has broad inspection rights, it is important to note that employment records are excluded from these audits, protecting the franchisee's control over their labor relations and employment practices.

Cooperation is expected from the franchisee during any inspection or audit. Failure to provide necessary reports or records, or any understatement of gross revenue exceeding two percent, may result in the franchisee being responsible for covering the costs of the inspection or audit, including attorney and accountant fees, as well as travel expenses.