Is refusing an audit a cause for termination of a Corcoran franchise?
Corcoran Franchise · 2025 FDDAnswer from 2025 FDD Document
- 16.2.3.2 Your underreporting and/or underpayment of at least 5% of Royalty Fees and/or BMF contributions within any three (3) month period, or your refusal to permit us to audit your operations and records, or your failure to reasonably cooperate with an audit;
Source: Item 23 — RECEIPTS (FDD pages 75–276)
What This Means (2025 FDD)
According to the 2025 Corcoran Franchise Disclosure Document, refusing to permit an audit of operations and records can lead to the termination of the franchise agreement. Specifically, if a franchisee refuses to allow Corcoran to audit their operations and records, this is grounds for default.
This provision means that Corcoran franchisees must comply with audit requests from the franchisor. Failure to cooperate with an audit, or outright refusal, can result in Corcoran taking action to terminate the franchise agreement. This is a fairly standard clause in franchise agreements, as franchisors need to verify financial reporting and compliance with system standards.
It's important for prospective Corcoran franchisees to understand that audits are a normal part of the franchise relationship and to be prepared to cooperate fully with any audit requests. Failure to do so can have serious consequences, including the loss of the franchise.