What is the minimum length of time a Chocolate Fish Coffee franchisee must keep deposit receipts?
Chocolate_Fish_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
- 10.4 Business Records. Franchisee shall keep complete and accurate books and records reflecting all expenditures and receipts of the Business, with supporting documents (including, but not limited to, payroll records, payroll tax returns, register receipts, production reports, sales invoices, bank statements, deposit receipts, cancelled checks and paid invoices) for at least three years. Franchisee shall keep such other business records as Chocolate Fish Franchising may specify in the Manual or otherwise in writing.
- 10.5 Records Audit. Chocolate Fish Franchising may examine and audit all books and records related to the Business, and supporting documentation, at any reasonable time. Chocolate Fish Franchising may conduct the audit at the Location and/or require Franchisee to deliver copies of books, records and supporting documentation to a location designated by Chocolate Fish Franchising. Franchisee shall also reimburse Chocolate Fish Franchising for all costs and expenses of the examination or audit if (i) Chocolate Fish Franchising conducted the audit because Franchisee failed to submit required reports or was otherwise not in compliance with the System, or (ii) the audit reveals that Franchisee understated Gross Sales by 3% or more for any 4-week period.
Source: Item 23 — RECEIPTS (FDD pages 41–119)
What This Means (2024 FDD)
According to Chocolate Fish Coffee's 2024 Franchise Disclosure Document, franchisees are required to maintain complete and accurate financial records for their business. This includes all expenditures and receipts, along with supporting documentation such as payroll records, tax returns, register receipts, production reports, sales invoices, bank statements, deposit receipts, cancelled checks, and paid invoices.
Specifically, Chocolate Fish Coffee mandates that franchisees retain these detailed business records and supporting documents for a minimum period of three years. This requirement ensures that franchisees can readily provide necessary documentation for audits or reviews conducted by Chocolate Fish Coffee.
Chocolate Fish Coffee retains the right to examine and audit these financial records at any reasonable time. These audits can take place at the franchisee's location or require the franchisee to provide copies of the records to a designated location. If an audit is triggered by the franchisee's failure to submit required reports or other non-compliance issues, or if the audit reveals an understatement of gross sales by 3% or more for any 4-week period, the franchisee will be responsible for reimbursing Chocolate Fish Coffee for all costs associated with the audit.