What sections of the Bombs Away franchise agreement outline the requirements for cooperation with audits and evaluations?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
ion reports, sales invoices, bank statements, deposit receipts, cancelled checks and paid invoices) for at least three years. Franchisee shall keep such other business records as Bombs Away Franchising may specify in the Manual or otherwise in writing.
- 10.5 Records Audit. Bombs Away Franchising may examine and audit all books and records related to the Business, and supporting documentation, at any reasonable time. Bombs Away Franchising may conduct the audit at the Location and/or require Franchisee to deliver copies of
books, records and supporting documentation to a location designated by Bombs Away Franchising. Franchisee shall also reimburse Bombs Away Franchising for all costs and expenses of the examination or audit if (i) Bombs Away Franchising conducted the audit because Franchisee failed to submit required reports or was otherwise not in compliance with the System, or (ii) the audit reveals that Franchisee understated Gross Sales by 3% or more for any month.
ARTICLE 11. FRANCHISOR RIGHTS
- 11.1 Manual; Modification. The Manual, and any part of the Manual, may be in any form or media determined by Bombs Away Franchising. Bombs Away Franchising may supplement, revise, or modify the Manual, and Bombs Away Franchising may change, add or delete System Standards at any time in its discretion. Bombs Away Franchising may inform Franchisee thereof by any method that Bombs Away Franchising deems appropriate (which need not qualify as "notice" under Section 18.9). In the event of any dispute as to the contents of the Manual, Bombs Away Franchising's master copy will control.
- 11.2 Business Evaluation. Bombs Away Franchising may accompany Franchisee or its personnel on any services performed for a customer to conduct an evaluation. If the Location will be open to the public or used for meeting customers or potential customers, Bombs Away Franchising may enter the premises of the Business from time to time during normal business hours and conduct an evaluation. Franchisee shall cooperate with Bombs Away Franchising's evaluators.
Source: Item 22 — CONTRACTS (FDD pages 35–36)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, several sections of the franchise agreement outline the requirements for cooperation with audits and evaluations. Section 10.5, titled "Records Audit," grants Bombs Away Franchising the right to examine and audit all books and records related to the business at any reasonable time. This includes the ability to conduct the audit at the franchisee's location or require the franchisee to deliver copies of records to a designated location. The franchisee is responsible for reimbursing Bombs Away for audit costs if they failed to submit required reports, were non-compliant with the system, or understated gross sales by 3% or more in any month.
Section 11.2, "Business Evaluation," allows Bombs Away Franchising to conduct evaluations by accompanying the franchisee or their personnel during services performed for customers. If the location is open to the public, Bombs Away may enter the premises during normal business hours to conduct an evaluation. Franchisees are required to cooperate with Bombs Away's evaluators, and these evaluations may include observing operations, conducting physical inventories, evaluating physical conditions, monitoring sales activity, speaking with employees and customers, and removing samples. Bombs Away Franchising may also videotape or take photographs during the evaluation. Failure to meet minimum score requirements set by Bombs Away for these evaluations constitutes a default under the agreement.
Finally, refusing to cooperate with or permit any audit or evaluation by Bombs Away or its agents or contractors, or otherwise failing to comply with Section 10.5 or Section 11.2, is grounds for termination of the franchise agreement as detailed in section 14.2. This means that a franchisee's failure to comply with audit or evaluation requests can have serious consequences, including the loss of their franchise. These measures ensure Bombs Away can maintain standards and verify compliance across all franchise locations.