What is the consequence if a Beverly Anns Cookie franchisee knowingly understates gross sales?
Beverly_Anns_Cookie Franchise · 2025 FDDAnswer from 2025 FDD Document
uation may include observing or participating during business hours. We may conduct our evaluation at any time and without prior notice. During the course of our inspections, we and our representatives will use reasonable efforts to minimize our interference with the operation of your Franchised Business, and you, your employees and independent contractors will cooperate and not interfere with our inspection. You consent to us accessing your Technology and retrieving any information we deem appropriate in conducting the inspection. At all times and without prior notice to you, we and our designated agents or representatives may: (1) inspect the Franchised Business, GR Vehicle, (and/or any Additional Equipment); (2) photograph the Franchised Business, GR Vehicle, (and any Additional Equipment) and observe and videotape the operation thereof; (3) observe any products and supplies; (4) interview the Franchised Business' managers, personnel, and customers; (5) inspect and copy any books, records, and documents relating to the Franchised Business' operation; and (6) access any electronic records related to the Franchised Business.
Audit
We may, at any time during your business hours, and without prior notice to you, examine your Franchised Business bookkeeping, and accounting records, sales and income tax records and returns, and other records. We may also conduct an audit through independent auditors, which may involve auditors conducting an examination at the location of your Franchised Business or, alternatively, your submission of such materials to auditors. We may also requir
Source: Item 23 — RECEIPTS (FDD pages 57–235)
What This Means (2025 FDD)
According to the 2025 Beverly Anns Cookie Franchise Disclosure Document, if a franchisee fails to furnish reports, supporting records, or other information as required, or to furnish these items on a timely basis, or if an examination reveals a failure to report, the franchisee agrees to reimburse Beverly Anns Cookie for the costs of the examination. This includes charges for attorneys and independent accountants, as well as travel expenses, room and board, and compensation for Beverly Anns Cookie's employees.
Additionally, if an audit reveals that the franchisee's purchases of Beverly Ann's Cookie branded cups equals less than thirty percent (30%) of their gross sales, the franchisee shall pay a branded cup audit fee of $3,000, unless they can provide written substantiation of proper usage of branded cups in their Franchised Business. These remedies are in addition to Beverly Ann's Cookie's other remedies and rights under the Franchise Agreement and applicable law.
This means that Beverly Anns Cookie has the right to audit a franchisee's business at any time, and if the franchisee is found to have underreported sales or failed to provide necessary documentation, they will be responsible for covering the costs associated with the audit. Furthermore, the branded cup audit fee could be levied if cup purchases don't align with reported sales, indicating potential underreporting or misuse of non-branded cups. This incentivizes accurate reporting and compliance with brand standards.