What happens if a Crave Cookies franchisee refuses to cooperate with an audit or inspection?

According to Crave Cookies' 2025 Franchise Disclosure Document, refusal to cooperate with or permit any audit or inspection by Crave Cookies or its agents or contractors, or otherwise failing to comply with Section 10.5 or Section 11.2 of the agreement, can lead to termination of the franchise agreement. This is considered a breach of contract that Crave Cookies can act upon without providing an opportunity for the franchisee to cure the breach.

Crave Cookies retains the right to conduct inspections of the premises during normal business hours. These inspections may include observing operations, conducting physical inventory, evaluating conditions, monitoring sales, speaking with employees/customers, and removing samples. Franchisees are required to cooperate with inspectors. Crave Cookies may also videotape or take photographs during the inspection. A minimum score may be set for inspections, and failure to meet it will be a default under the agreement.

Crave Cookies also has the right to examine and audit all books and records related to the business at any reasonable time. This audit can occur at the franchise location or the franchisee may be required to deliver copies of the documents to a location designated by Crave Cookies. If an audit is conducted because the franchisee failed to submit required reports or was not in compliance with the system, or if the audit reveals that the franchisee understated gross sales by 3% or more for any 4-week period, the franchisee will be responsible for reimbursing Crave Cookies for all costs and expenses of the audit.

In summary, a Crave Cookies franchisee must comply with audits and inspections. Failure to do so constitutes a significant breach of the franchise agreement and may result in termination without an opportunity to correct the issue. Franchisees should maintain accurate records and be prepared to cooperate fully with any inspection or audit conducted by Crave Cookies to avoid potential penalties or termination.