What constitutes a violation of Section 10.5 for a Crave Cookies franchise?

According to Crave Cookies' 2025 Franchise Disclosure Document, a franchisee's refusal to cooperate with or permit any audit or inspection by Crave Cookies Franchising or its agents or contractors, or otherwise failing to comply with Section 10.5, constitutes a breach of the franchise agreement.

Section 10.5 specifically pertains to record audits. Crave Cookies Franchising retains the right to examine and audit all books and records related to the Crave Cookies business, including supporting documentation, at any reasonable time. This audit can be conducted at the franchise location or the franchisee may be required to deliver copies of the books, records, and supporting documentation to a location designated by Crave Cookies.

Furthermore, the franchisee may be responsible for reimbursing Crave Cookies for all costs and expenses associated with the examination or audit under certain conditions. These conditions include situations where Crave Cookies conducted the audit because the franchisee failed to submit required reports or was otherwise not in compliance with the Crave Cookies system. Reimbursement is also required if the audit reveals that the franchisee understated gross sales by 3% or more for any 4-week period. Therefore, franchisees must maintain accurate records and fully cooperate with any audits to avoid violating Section 10.5 and potentially incurring additional costs.