If a Chocolate Bash franchisee refuses to permit an audit by CB Franchising, what are the consequences?

Based on the 2024 Franchise Disclosure Document, Chocolate Bash has the right to examine and audit all of a franchisee's business records and supporting documentation at any reasonable time. This audit can be conducted at the franchisee's location or the franchisee may be required to deliver copies of the books and records to a location designated by Chocolate Bash.

If a Chocolate Bash franchisee fails to submit required reports or is otherwise not in compliance with the Chocolate Bash system, or if an audit reveals that the franchisee understated gross sales by 2% or more, the franchisee will be responsible for reimbursing Chocolate Bash for all costs and expenses associated with the audit.

While the FDD excerpt details the conditions under which a franchisee would be responsible for covering the costs of an audit, it does not explicitly state the consequences of refusing to permit an audit. A prospective Chocolate Bash franchisee should seek clarification from the franchisor regarding the specific repercussions of not complying with an audit request, as this could potentially lead to further action such as a notice of default or even termination of the franchise agreement.