During an audit of Card My Yard, what must be evaluated regarding accounting policies?
Card_My_Yard Franchise · 2025 FDDAnswer from 2025 FDD Document
petition covenant set forth in Exhibit B or eliminate such noncompetition covenant altogether for any person that is required to execute such agreement.
XII. BOOKS AND RECORDS
- A. Maintenance of Books and Records. You must maintain during the term of this Agreement, in accordance with generally accepted accounting principles and in the form and manner we prescribe from time to time in the Manuals, full, complete and accurate books, records and accounts of the Card My Yard business, including, but not limited to, sales slips, coupons, purchase orders, payroll records, check stubs, bank statements, sales tax records and returns, cash receipts and disbursements, journals and ledgers. You agree to preserve such books and records for at least five (5) years from the date of preparation.
- B. Reporting. In addition to other reports required by this Agreement, you agree to submit to us, in the form we prescribe from time to time and at your expense:
- (1) Periodic Order Reports as requested by us from time to time and, at our request, monthly income statements (which may be unaudited), signed by your General Manager or comparable officer attesting that it is true, complete and correct.
- (2) Within five (5) days after our written request, copies of your federal income tax returns (including any extension requests) and within five (5) days after the end of each calendar quarter, copies of your state sales tax returns.
Source: Item 23 — RECEIPTS (FDD pages 84–259)
What This Means (2025 FDD)
According to Card My Yard's 2025 Franchise Disclosure Document, franchisees must maintain full, complete, and accurate books, records, and accounts of the Card My Yard business in accordance with generally accepted accounting principles. These records must be kept in the form and manner prescribed by Card My Yard in their manuals throughout the agreement term. The records include sales slips, coupons, purchase orders, payroll records, check stubs, bank statements, sales tax records and returns, cash receipts and disbursements, journals, and ledgers.
The franchisor or their designee has the right to review, audit, examine, and copy the franchisee's books and records relating to the Card My Yard business at all reasonable times. If any required payments are delinquent or an audit reveals that payments have been understated, the franchisee must pay the overdue or understated amount with interest.
Furthermore, if an audit uncovers an understatement in any report of 2% or more, the franchisee is responsible for reimbursing Card My Yard for all costs and expenses associated with the audit, including legal and accounting fees. These measures ensure financial transparency and compliance within the Card My Yard franchise system, allowing the franchisor to verify the accuracy of reported financials and adherence to accounting standards.