What section of the City Wide Franchise Agreement discusses the franchisee's obligations regarding inspections and audits?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
tivity report for the preceding month in a form approved by CITY WIDE, and as further set forth in the Operating Manual.
- 11.6 Local Advertising Report. Upon request, Franchisee shall deliver quarterly to CITY WIDE, no later than fifteen (15) days after the end of each of Franchisee's fiscal quarters, a report of the local advertising funds Franchisee spent, along with such supporting materials as may be required by CITY WIDE, on a form approved by CITY WIDE, for the preceding quarter's local advertising.
- 11.7 Inspection Rights of Business Records; Audit; Underpayment and Overpayment. CITY WIDE or its Representative (as defined in Section 16) will have the right at all reasonable times to examine and copy, at its expense, the Business Records. CITY WIDE may, at its sole and absolute right, require Franchisee to allow CITY WIDE daily access to the Business Records at reasonable times via electronic means. CITY WIDE will also have the right, at any time, to have an independent audit made of such Business Records or require Franchisee to submit annual audited or reviewed financial statements. If an audit or inspection should reveal that any payments to CITY WIDE have been understated in any report to CITY WIDE, then Franchisee will immediately pay CITY WIDE, upon demand, the understated amount plus interest at the maximum rate permitted by law, from the date such amount was due until paid. If an audit or inspection discloses an understatement of any such payment of two percent (2%) or more, then in addition, Franchisee will also reimburse CITY WIDE for all costs and expenses connected with the audit or inspection (including, without limitation, reasonable accounting and attorneys' fees). The foregoing remedies will be in addition to any other remedies CITY WIDE may have. Any overpayment of any amounts by Franchisee to CITY WIDE discovered by such inspection will be credited by CITY WIDE against future amounts payable by Franchisee to CITY WIDE under this Agreement.
- 11.8 Inspection Rights regarding Franchisee Records. CITY WIDE or its Representative will have the right at all reasonable times to examine and copy, at its expense, the books, records, and tax returns of Franchisee's subcontractors. CITY WIDE may, at its sole and absolute right, require Franchisee to arrange for CITY WIDE to have access to the books and records of subcontractors in relation to all work performed for Franchisee as a CITY WIDE Franchisee, at reasonable times, not to exceed two (2) times during any calendar year.
- 11.9 Late Payments or Failure to Pay, Default. Franchisee acknowledges that nothing contained in this Agreement constitutes agreement by CITY WIDE to accept any payments after they are due or to extend credit to or otherwise finance Franchisee's operation of the Franchised Business. Further, Franchisee acknowledge that Franchisee's failure to pay all amounts when due will constitute a material default and grounds for termination of this Agreement.
- 11.10 Software. Franchisee will use exclusively and pay all sub-licensing fees to CITY WIDE for the software ("Software") in Franchisee's Franchised Business during the term of this Agreement, as set forth in the Operating Manual or otherwise in writing.
- 11.11 Internet Access and E-Mail Address. Franchisee will need to subscribe to a high speed Internet Access provider in accordance with CITY WIDE's standards and specifications.
Source: Item 9 — FRANCHISEE'S OBLIGATIONS (FDD pages 28–29)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, several sections of the Franchise Agreement outline the franchisee's obligations regarding inspections and audits. Section 23.1, titled "Right to Inspect," grants City Wide and its representatives the right to inspect the franchised business and all business records during regular business hours, with or without notice, to ensure compliance with the agreement. Franchisees are required to cooperate fully with these inspections, though City Wide agrees to conduct them in a manner that doesn't unduly disrupt the business.
Section 11.7, "Inspection Rights of Business Records; Audit; Underpayment and Overpayment," further details City Wide's right to examine and copy business records at reasonable times and at its own expense. City Wide can also require daily access to business records via electronic means and has the right to conduct independent audits or require annual audited or reviewed financial statements. If an audit reveals understated payments, the franchisee must pay the difference plus interest. If the understatement is 2% or more, the franchisee must also cover the costs of the audit.
Section 11.8, titled "Inspection Rights regarding Franchisee Records," allows City Wide to examine and copy the books, records, and tax returns of the franchisee's subcontractors at its expense. City Wide may also require the franchisee to arrange access to the subcontractors' books and records, related to work performed for the City Wide franchise, up to two times per calendar year. Finally, Section 15.1 states that termination of the agreement does not relieve the franchisee of obligations relating to the maintenance of statements and records and inspection and auditing of records.