Which section of the Chem Dry Franchise Agreement addresses the franchisee's responsibilities related to records and reporting?
Chem_Dry Franchise · 2024 FDDAnswer from 2024 FDD Document
11. RECORDS AND REPORTING
A. ACCOUNTING AND RECORDS
FRANCHISEE agrees, at FRANCHISEE's own expense, to maintain and preserve, in a secure location at the BUSINESS, for five (5) years from the date of their preparation, or such greater period as may be required by the Manual or applicable law, full, complete and accurate books, records and accounts including, without limitation copies of all customer contracts and the Customer List, employee records, sales, invoices, cash receipts, service records, purchase records, accounts payable, cash disbursement records, inventory records, general ledgers, itemized bank deposit slips and bank statements, copies of sales tax returns, and copies of FRANCHISEE'S state and federal income tax returns. These records must be maintained in the English language. CDI may require FRANCHISEE to have audited financial statements prepared annually during the term of this Agreement.
B. REPORTING REQUIREMENTS
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- FRANCHISEE shall furnish CDI, at CDI's request, in the form from time to time prescribed by CDI, a control report signed and verified by FRANCHISEE accurately reflecting the gross and net revenues of FRANCHISEE'S CHEM-DRY Business for the preceding specified time period and copies of all customer invoices during such time period. FRANCHISEE, at his or her expense, shall furnish to CDI (and its agents) for inspection, audit and copying, such forms, reports, records, financial statements and other information as CDI may, from time to time require. Moreover, CDI may, as often as it deems appropriate, access the Computer System and retrieve all information relating to the BUSINESS' operation, including without limitation the Customer List.
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- If CDI is required by any government agency to collect financial information from franchisees, FRANCHISEE shall furnish CDI, by May 1 of each year, or any other date necessary to meet such reporting requirements, a copy of the appropriate documentation showing income and expenses for the Business.
Source: Item 23 — Receipts (FDD pages 68–264)
What This Means (2024 FDD)
According to Chem Dry's 2024 Franchise Disclosure Document, Section 11 of the Franchise Agreement, titled "Records and Reporting," outlines the franchisee's responsibilities for maintaining records and providing reports to Chem Dry.
Specifically, Section 11.A, "Accounting and Records," requires the franchisee to maintain full, complete, and accurate books, records, and accounts at their own expense. These records must be kept in a secure location at the business for five years from the date of preparation, or longer if required by the Manual or applicable law. The records include copies of customer contracts, customer lists, employee records, sales invoices, cash receipts, service records, purchase records, accounts payable, cash disbursement records, inventory records, general ledgers, itemized bank deposit slips and bank statements, copies of sales tax returns, and copies of state and federal income tax returns. All records must be maintained in English. Chem Dry may also require franchisees to have audited financial statements prepared annually.
Section 11.B, "Reporting Requirements," states that franchisees must furnish Chem Dry with a control report, in a format prescribed by Chem Dry, that accurately reflects the gross and net revenues of the Chem Dry business for a specified time period, along with copies of all customer invoices during that period. Franchisees must also provide Chem Dry (and its agents) with forms, reports, records, financial statements, and other information for inspection, audit, and copying, as required from time to time. Chem Dry can also access the Computer System to retrieve information related to the business's operation, including the Customer List. If a government agency requires Chem Dry to collect financial information from franchisees, the franchisee must provide Chem Dry with a copy of the appropriate documentation showing income and expenses for the business by May 1 of each year, or any other date necessary to meet the reporting requirements.