Does City Publications have the right to inspect a franchisee's location at any time, or are there restrictions?
City_Publications Franchise · 2025 FDDAnswer from 2025 FDD Document
D. Right of Franchisor to Perform Inspection
Franchisor or its designated agents shall have the right at all reasonable times to examine and copy, at Franchisor's expense, the books, records and tax returns of Franchisee. In addition, the same shall have the right to interview customers, employees, vendors and/or suppliers and at any time, to have an independent audit made of Franchisee's books and records at Franchisor's expense. If an inspection should reveal that the Gross Sales or any fees or payments to Franchisor have been understated in any report to Franchisor, then Franchisee shall immediately pay to Franchisor the amount understated plus interest from the date such amount was due until paid, at the rate of one and one-half percent (1.5%) per month or the maximum rate permitted by law. If an inspection discloses an understatement in any payment report of three percent (3%) or more, Franchisee s
Source: Item 23 — RECEIPT (FDD pages 39–129)
What This Means (2025 FDD)
According to City Publications' 2025 Franchise Disclosure Document, City Publications has specific rights regarding the inspection of a franchisee's business operations. City Publications or its designated agents have the right to examine and copy the franchisee's books, records, and tax returns at all reasonable times, with City Publications bearing the expense of such examination and copying. They also have the right to interview customers, employees, vendors, and/or suppliers. City Publications can also have an independent audit conducted of the franchisee's books and records, again at City Publications' expense.
If an inspection reveals that the franchisee has understated gross sales or any fees or payments owed to City Publications, the franchisee must immediately pay the understated amount plus interest. The interest is calculated from the date the amount was originally due until it is paid, at a rate of 1.5% per month or the maximum rate permitted by law.
Furthermore, if the inspection uncovers an understatement in any payment report of 3% or more, the franchisee is responsible for covering the costs of the inspection. This provides a financial incentive for franchisees to maintain accurate records and report sales and payments correctly. These inspection rights allow City Publications to monitor compliance with the franchise agreement and ensure accurate financial reporting across all franchise locations.