What happens if a Bumper Man franchisee under-reports Gross Sales?

• (xii) Franchisee under-states Gross Sales or fails to accurately report Gross Sales or its performance of any Designated Services, and does not correct such failure within three days after Notice of such failure is delivered to Franchisee, including without limitation payment of the Non-Reported Designated Services Fee for such failure to report performance of Designated Services;

Franchisor will notify Franchisee in writing of any information or records discovered as it deems appropriate, and, if notified, Franchisee will promptly correct and repair, as applicable, any such conditions. Any audit, examination, or inspection will be at Franchisor's cost and expense unless: (a) Franchisor is conducting the audit, examination, or inspection due to Franchisee's failure to submit reports; or (b) the reports submitted by Franchisee for the Reporting Period show (i) an understatement of Gross Sales by 1.25% or more, (ii) an underpayment of Continuing Service Fee, and/or (iii) Franchisee's failure to report its performance of Designated Services (and thus for which Non-Reported Designated Services Fees are owed to Franchisor), in which cases all reasonable and necessary costs and expenses related to such examination will be paid by Franchisee (including, without limitation, reasonable accounting and attorneys' fees).

This Agreement will terminate immediately upon delivery of Notice to Franchisee if Franchisee (or any of its Principals) fails on three or more separate occasions within any period of 12 consecutive months to do any one or more or combination of the following: (1) submit when due reports or other data, information or supporting record; (2) pay when due any amounts due to Franchisor or its Affiliates; or (3) otherwise materially comply with this Agreement, whether or not such failures are corrected after Notice of such failure is delivered to Franchisee.

Source: Item 23 — RECEIPTS (FDD pages 45–180)