During an audit of Card My Yard, what should 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. If the Card My Yard business is in a state which requires you to pay state income tax, you must also
provide a copy of your state income tax return (including any extension requests) not later than five (5) days after our written request.
- (3) At the times reasonably required by us, such other forms, reports, records, information and data as we may reasonably designate.
- C. Audits. We or our designees will have the right at all reasonable times to review, audit, examine and copy your books and records relating to the Card My Yard business. If any required payments to us are delinquent, or if an examination or audit should reveal that any payments have been understated in any report to us, then you must pay to us upon demand the amount overdue or understated with interest determined in accordance with Section V.I. If an examination or audit discloses an understatement in any report of two percent (2%) or more, you must, in addition, reimburse us for all costs and expenses connected with the audit (including, without limitation, legal and accounting fees and costs). These remedies shall be in addition to any other remedies we may have atlaw or in equity.
- D. No Waiver.
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 its manuals and preserved for at least five years from the date of preparation. The types of records to be maintained include sales slips, coupons, purchase orders, payroll records, check stubs, bank statements, sales tax records and returns, cash receipts and disbursements, journals, and ledgers.
Card My Yard has the right to review, audit, examine, and copy a franchisee's books and records relating to the Card My Yard business at all reasonable times. If any required payments are delinquent or understated, the franchisee must pay the amount overdue or understated, along with interest. If an audit reveals an understatement of two percent or more in any report, the franchisee must reimburse Card My Yard for all costs and expenses connected with the audit, including legal and accounting fees.
Card My Yard's acceptance of statements or payments from a franchisee does not prevent them from questioning the correctness of those statements or payments at any time. If errors are discovered, the franchisee must immediately correct the error and make the appropriate payment. Franchisees also authorize banks, financial institutions, businesses, suppliers, manufacturers, contractors, vendors, and other entities to disclose financial information about the franchisee or the Card My Yard business to Card My Yard upon request. Card My Yard is further authorized to disclose data from the franchisee's reports to prospective franchisees or other third parties if they deem it necessary or advisable.