Does Carbones Pizzeria need to provide notice before accessing the Restaurant's accounting and financial systems?
Carbones_Pizzeria Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisor reserves the right, without notice to Franchisee, to independently access the Restaurant's accounting and financial systems and data or any accounting or financial systems used or required by Franchisor for the Carbone System to determine Gross Sales and fees due to Franchisor under this Agreement, and Franchisee shall grant Franchisor access to all such accounting and financial systems and data.
If Franchisee fails to timely report Gross Sales for any period, withholds Franchisor's access to accounting and financial systems or data, or otherwise fails to pay amounts due to Franchisor, Franchisor may debit Franchisee's account for: (i) one hundred ten percent (110%) of the Royalty fees and Advertising Contributions last paid by Franchisee.
Source: Item 23 — RECEIPTS (FDD pages 30–116)
What This Means (2025 FDD)
According to Carbones Pizzeria's 2025 Franchise Disclosure Document, Carbones Pizzeria reserves the right to independently access the Restaurant's accounting and financial systems without providing prior notice to the franchisee. This access is to determine Gross Sales and fees due to Carbones Pizzeria under the Franchise Agreement. The franchisee is obligated to grant Carbones Pizzeria access to all such accounting and financial systems and data.
This lack of required notice means that Carbones Pizzeria can review a franchisee's financial records at any time, without alerting the franchisee beforehand. This could be seen as both a benefit and a risk. On one hand, it ensures transparency and allows Carbones Pizzeria to quickly identify and address any discrepancies in reported sales or fees. On the other hand, it may create concerns for franchisees about privacy and the potential for unexpected audits.
Furthermore, if a franchisee fails to report Gross Sales in a timely manner, withholds access to accounting and financial systems, or otherwise fails to pay amounts due, Carbones Pizzeria has the right to debit the franchisee's account for 110% of the Royalty fees and Advertising Contributions last paid by the franchisee. This clause underscores the importance of accurate and timely financial reporting by the franchisee and the potential financial consequences of non-compliance.