What sections of the Crave Cookies agreement define the audit and inspection requirements?
Crave_Cookies Franchise · 2025 FDDAnswer from 2025 FDD Document
l records, payroll tax returns, register receipts, production reports, sales invoices, bank statements, deposit receipts, cancelled checks and paid invoices) for at least three years. Franchisee shall keep such other business records as Crave Cookies Franchising may specify in the Manual or otherwise in writing.
- 10.5 Records Audit. Crave Cookies Franchising may examine and audit all books and records related to the Business, and supporting documentation, at any reasonable time. Crave Cookies Franchising may conduct the audit at the Location and/or require Franchisee to deliver copies of books, records and supporting documentation to a location designated by Crave Cookies Franchising. Franchisee shall also reimburse Crave Cookies Franchising for all costs and expenses of the examination or audit if (i) Crave Cookies Franchising conducted the audit because Franchisee failed to submit required reports or was otherwise not in compliance with the
System, or (ii) the audit reveals that Franchisee understated Gross Sales by 3% or more for any 4-week period.
ARTICLE 11. FRANCHISOR RIGHTS
- 11.1 Manual; Modification. The Manual, and any part of the Manual, may be in any form or media determined by Crave Cookies Franchising. Crave Cookies Franchising may supplement, revise, or modify the Manual, and Crave Cookies Franchising may change, add or delete System Standards at any time in its discretion. Crave Cookies Franchising may inform Franchisee thereof by any method that Crave Cookies Franchising deems appropriate (which need not qualify as "notice" under Section 18.9). In the event of any dispute as to the contents of the Manual, Crave Cookies Franchising's master copy will control.
Source: Item 22 — CONTRACTS (FDD page 47)
What This Means (2025 FDD)
According to Crave Cookies' 2025 Franchise Disclosure Document, the audit and inspection requirements are detailed in specific sections of the franchise agreement. Section 10.5, titled "Records Audit," grants Crave Cookies Franchising the right to examine and audit all books and records related to the franchisee's business at any reasonable time. This audit can occur at the franchisee's location or require the franchisee to deliver copies of the necessary documents to a location designated by Crave Cookies Franchising.
Furthermore, the franchisee is responsible for reimbursing Crave Cookies Franchising for all costs and expenses associated with the audit if the audit is conducted due to the franchisee's failure to submit required reports or other non-compliance issues, or if the audit reveals that the franchisee understated gross sales by 3% or more for any 4-week period. This provision ensures that Crave Cookies has the ability to verify the financial accuracy of each franchise and holds franchisees accountable for accurate reporting.
In addition to audits, Section 11.2, titled "Inspections," allows Crave Cookies Franchising to enter the premises of the business during normal business hours to conduct inspections. These inspections may include observing operations, conducting physical inventory, evaluating physical conditions, monitoring sales activity, speaking with employees and customers, and removing samples of products, supplies, and materials. Crave Cookies Franchising also reserves the right to videotape and/or take photographs during the inspection. The franchise agreement also states that Crave Cookies Franchising may set a minimum score requirement for inspections, and failure to meet or exceed the minimum score will be a default under the agreement.