What is a Checkers franchisee obligated to do during an inspection of their Franchised Restaurant?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
12.02 Audits. We have the right at any time during business hours, and without prior notice to you, to inspect, copy and audit the books, records, tax returns and documents relating to the development, ownership, lease, occupancy or operation of the Franchised Restaurant. You must cooperate fully with our representatives and independent accountants conducting such audits. If any inspection or audit discloses an understatement of Net Sales, you must pay us, within 7 days after receipt of the audit report, the royalties and NPF contributions due on the amount of such understatement, plus interest (as provided in Section 6.04) from the date originally due until the date of payment. Further, if such inspection or audit is made necessary by your failure to furnish reports, records or information on a timely basis, or if we determine an understatement of Net Sales for the period of any audit to be greater
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, Checkers retains the right to inspect and audit a franchisee's restaurant operations. Specifically, Checkers can conduct inspections, copy documents, and audit books, records, and tax returns related to the development, ownership, lease, occupancy, or operation of the franchised restaurant at any time during business hours and without prior notice.
A Checkers franchisee is obligated to cooperate fully with Checkers' representatives and independent accountants during these audits. If an inspection or audit reveals an understatement of Net Sales, the franchisee must pay Checkers the royalties and NPF contributions due on the understated amount, along with interest calculated from the original due date until the payment date.
Furthermore, if the audit is necessitated by the franchisee's failure to provide timely reports, records, or information, or if the understatement of Net Sales for the audit period exceeds 2%, the franchisee is responsible for reimbursing Checkers for the costs associated with the audit or inspection. This reimbursement covers charges from attorneys and independent accountants, as well as travel expenses, room and board, and compensation for Checkers' employees involved in the process. This means that consistent and accurate reporting is crucial for Checkers franchisees to avoid potentially significant financial penalties.