What are the consequences if a Bombs Away franchisee refuses to cooperate with audits or evaluations by Bombs Away Franchising?

According to Bombs Away's 2024 Franchise Disclosure Document, a franchisee's refusal to cooperate with audits or evaluations conducted by Bombs Away Franchising or its agents can lead to termination of the franchise agreement. Specifically, if a franchisee refuses to cooperate with or permit any audit or evaluation by Bombs Away Franchising or its agents or contractors, or otherwise fails to comply with Section 10.5 or Section 11.2 of the agreement, it constitutes grounds for termination.

Bombs Away retains the right to conduct business evaluations, which may involve observing operations, conducting physical inventories, evaluating conditions, monitoring sales, speaking with employees and customers, and even taking samples or videotaping. Franchisees are expected to cooperate with these evaluations. Bombs Away may also set minimum score requirements for evaluations, and failure to meet these scores can result in a default under the franchise agreement.

Furthermore, Bombs Away has the right to examine and audit all books and records related to the business at any reasonable time. This audit can occur at the franchisee's location or at a location designated by Bombs Away, and the franchisee may be required to provide copies of the necessary documents. If an audit is triggered by the franchisee's failure to submit required reports or non-compliance with the system, or if the audit reveals that the franchisee understated gross sales by 3% or more for any month, the franchisee will be responsible for reimbursing Bombs Away for all costs and expenses associated with the audit.

In summary, Bombs Away franchisees must comply with audits and evaluations, as failure to do so can lead to termination of the franchise agreement and financial penalties. This underscores the importance of maintaining accurate records and adhering to Bombs Away's operational standards.