Does Aw have the right to audit an Aw franchisee's business records?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
- 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.
You agree to fully cooperate with our representatives and independent accountants we may hire to conduct any inspection or audit.
If any inspection or audit discloses an understatement of the gross revenue of the Papa Ray's Pizza Restaurant, you agree to pay us, within ten (10) days after receipt of the inspection or audit report, the marketing contributions due, plus interest on the amount of the understatement (at the rate and on the terms provided in Paragraph 10.6) from the date originally due until the date of payment.
Further, if the inspection or audit is made necessary by your failure to furnish the reports, supporting records, other information or financial statements required by this Agreement, or to furnish those reports, records, information or financial statements on a timely basis, or discloses an understatement of the Gross Revenue of the Papa Ray's Pizza Restaurant of greater than two percent (2%) for any period, you agree to reimburse us for the cost of such inspection or audit, including, without limitation, the charges of attorneys and any independent accountants, and the travel expenses, room and board and applicable per diem charges for our employees.
The above remedies are in addition to all our other remedies and rights under this Agreement or under applicable law.
- 13.4 Our Right to Inspect the Papa Ray's Pizza Restaurant.
To determine whether you and the Papa Ray's Pizza Restaurant are complying with this Agreement, and with the specifications, standards, and operating procedures we prescribe for the operation of Papa Ray's
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, Aw has the right to audit a franchisee's business records. Specifically, Aw has the right to 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 which is the franchisee. This audit can occur at any time during business hours and without advance notice to the franchisee. However, these audits will not include employment records for the franchisee's employees.
As an Aw franchisee, you are obligated to fully cooperate with Aw's representatives and any independent accountants they hire to conduct an inspection or audit. If an audit reveals an understatement of gross revenue, you must pay the marketing contributions due, plus interest on the understated amount. The interest will be calculated from the original due date until the date of payment, as detailed in Paragraph 10.6 of the agreement.
Furthermore, Aw can charge you for the cost of the audit if it is triggered by your failure to provide required reports, records, information, or financial statements on time. You will also be responsible for covering the costs of the audit if the audit reveals an understatement of Gross Revenue exceeding two percent (2%) for any period. These costs include charges for attorneys and independent accountants, as well as travel expenses, room and board, and applicable per diem charges for Aw's employees. These remedies are in addition to any other rights Aw has under the agreement or applicable law.
In addition to the right to audit, Aw also has the right to inspect the Papa Ray's Pizza Restaurant to ensure compliance with the Franchise Agreement, specifications, standards, and operating procedures. This includes the right to enter and inspect the premises, observe operations, interview employees and customers, select inventory items for testing, and inspect and copy any books, records, and documents related to the restaurant's operation. These measures help Aw maintain the integrity of its brand and ensure consistent quality across all franchise locations.