Where in the Clear Pest Pros franchise agreement can I find information about inspections and audits?
Clear_Pest_Pros Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 22: CONTRACTS]
8. INSPECTIONS AND AUDITS.
A. OUR RIGHT TO INSPECT THE BUSINESS.
To determine whether you are complying with this Agreement and all System Standards, we have the right at any time during business hours to perform an on-site inspection of your business at your Office Site, and any other locations through which the Clear Pest Pros Business is operated. During such inspection, we may: (i) participate in quality checks of home field services; (ii) interview employees; or (iii) review (a) your books and records, (b) your promotional materials and media advertising, (c) your personnel files and practices, and/or (d) any and all components of the Clear Pest Pros Business.
You promise to cooperate fully with us in any inspection of your Clear Pest Pros Business, and we promise to use our best efforts to not interfere with the operation of your Clear Pest Pros Business.
B. OUR RIGHT TO AUDIT.
We have the right at any time during business hours, and without prior notice to you, to inspect and audit, or cause to be inspected and audited, any and all financial statements, reports, income tax records, sales tax records, payroll records, software databases, and other records. You promise to cooperate fully with our representatives and independent accountants we hire to conduct any inspection or audit.
If any inspection or audit discloses an understatement of Gross Sales, we can debit your account, as provided in Sections 2.C and 2.H of this Agreement, for the Royalty and Brand Marketing Fund Fees which are due on the amount of the understatement, plus interest, at the rate of 18% per annum or the maximum rate permitted by applicable law, whichever is lesser, and all late fees, from the date originally due until the date of payment.
Source: Item 22 — CONTRACTS (FDD pages 67–68)
What This Means (2025 FDD)
According to Clear Pest Pros' 2025 Franchise Disclosure Document, details regarding inspections and audits can be found in Article 8 of the franchise agreement. This section outlines Clear Pest Pros' right to conduct on-site inspections of the franchisee's business, including quality checks, employee interviews, and reviews of various business records and materials. Clear Pest Pros states that it will try its best not to interfere with the operation of the Clear Pest Pros Business.
Additionally, Clear Pest Pros has the right to inspect and audit financial records, including statements, tax records, and software databases, without prior notice. The franchisee is obligated to cooperate fully with Clear Pest Pros' representatives and independent accountants during these inspections and audits.
If an audit reveals an understatement of Gross Sales, Clear Pest Pros can debit the franchisee's account for the owed Royalty and Brand Marketing Fund Fees, along with interest at a rate of 18% per annum (or the maximum rate permitted by law) and any late fees. This provision highlights the importance of accurate financial reporting and record-keeping for Clear Pest Pros franchisees.