What access must a Beauty Bungalows franchisee provide to the franchisor or its agents for auditing purposes?
Beauty_Bungalows Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee must provide Franchisor or its agent's access to Franchisee's Business and computer systems to examine or audit Franchisee's Business, at any reasonable time on at least ten (10) days prior notice to Franchisee. Franchisor will bear the cost of the audit, unless Franchisee fails to report as required or understates Gross Revenue by two percent (2%) or more for any reported time period, in which case Franchisee will pay the audit cost plus interest on understated costs of one percent (1%) per month. Franchisee must immediately pay to Franchisor all sums owed in addition to any other remedies provided in this Agreement or by law.
Source: Item 22 — CONTRACTS (FDD pages 47–48)
What This Means (2025 FDD)
According to Beauty Bungalows's 2025 Franchise Disclosure Document, a franchisee must provide Beauty Bungalows or its agents access to the franchisee's business and computer systems for examination or auditing purposes. This access must be granted at any reasonable time, given at least ten days' prior notice to the franchisee.
Beauty Bungalows will bear the cost of the audit unless the franchisee has failed to report as required or has understated gross revenue by 2% or more for any reported time period. In such cases, the franchisee is responsible for paying the audit cost, along with interest on the understated costs at a rate of 1% per month.
In addition to providing access for audits, Beauty Bungalows franchisees are obligated to maintain accurate records related to the franchised business for six years following the termination or expiration of the franchise agreement. Franchisees must also prepare financial reports in a form reasonably approved by Beauty Bungalows and deliver copies of accounting, tax, and other documents and information within ten business days of Beauty Bungalows's request. Franchisees must also provide Beauty Bungalows with a copy of their annual financial statements, including a profit and loss statement and balance sheet, prepared or compiled by an independent Certified Public Accountant within 90 days after the franchisee's fiscal year end.