What is the minimum length of time a Chocolate Fish Coffee franchisee must keep sales invoices?
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.
The FDD specifies that these records and supporting documents must be kept for a minimum period of three years. This requirement ensures that Chocolate Fish Coffee franchisees have sufficient documentation for audits, tax purposes, and general financial management.
Chocolate Fish Coffee also retains the right to examine and audit these records at any reasonable time. This audit can take place at the franchisee's location or the franchisee may be required to provide copies of the documents to a location designated by Chocolate Fish Coffee. If an audit is required because the franchisee failed to submit required reports or was not in compliance with the Chocolate Fish Coffee system, or if the audit reveals that the franchisee understated gross sales by 3% or more for any 4-week period, the franchisee will be responsible for reimbursing Chocolate Fish Coffee for all costs and expenses associated with the audit.