What rights do Degree Wellness or its agents have to inspect a Degree Wellness franchise?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
13. INSPECTIONS AND AUDITS.
- 13.1 Our Right to Inspect the Franchise. To determine whether you and the Franchise are complying with this Agreement and the specifications, programs, standards, and operating procedures we prescribe for the operation of the Franchise, we or our agents, such as a "mystery shopper" service, have the right, at any reasonable time and without advance notice to you, to: (1) inspect the Premises; (2) observe the operations of the Franchise for such consecutive or intermittent periods as we deem necessary; (3) interview personnel of the Franchise; (4) interview customers of the Franchise; and (5) inspect and copy any books, referral sources, marketing and advertising, records and documents relating to the operation of the Franchise, including, without limitation, those required to be maintained and/or furnished under Section 12 above. You agree that we or our agents may record telephone calls placed to your Franchised Business. You agree to fully cooperate with us in connection with any of those inspections, observations and interviews and must promptly correct any deficiencies in the operation of your Franchise of which we advise you. You agree to present to your customers any evaluation forms we periodically prescribe, and agree to participate in, and/or request that your customers participate in, any surveys performed by or on our behalf. During any inspection of the Premises and/or the Franchise as contemplated under this Paragraph 13.1, we will comply with all laws and regulations applicable to us relating to any personal health information of your patients, as set forth in the business associate agreement that you must sign with us.
- 13.2 Our Right to Audit. We have the right at any time during business hours, and without advance notice to you, to inspect and audit, or cause to be inspected and audited, the business records, bookkeeping and accounting records, sales and income tax records and returns and other records of the Franchise, and the books and records of any corporation, limited liability company, or partnership that holds the Franchise. You agree to fully cooperate with our representatives, agents, and any independent accountants we may hire to conduct any inspection or audit, and to pay upon demand any underpayment found to have occurred, plus interest at the past due payment rate set forth earlier in this Agreement. You agree to supply us or our representatives with true, accurate and complete copies of requested documents
Source: Item 23 — Receipts (FDD pages 66–257)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, Degree Wellness or its agents have the right to inspect a franchise to ensure compliance with the franchise agreement, specifications, programs, standards, and operating procedures. These inspections can be conducted at any reasonable time and without prior notice.
Specifically, Degree Wellness or its agents can inspect the premises, observe operations for consecutive or intermittent periods, interview personnel and customers, and inspect and copy any relevant books, records, and documents, including those related to marketing, advertising, and referral sources. The FDD specifies that Degree Wellness can use services such as "mystery shoppers" to evaluate the franchise. Franchisees must fully cooperate with these inspections, observations, and interviews and promptly correct any identified deficiencies.
Furthermore, Degree Wellness has the right to audit the business records, bookkeeping, accounting records, sales and income tax records, and other records of the franchise at any time during business hours and without advance notice. This includes the records of any corporation, limited liability company, or partnership holding the franchise. Franchisees are required to cooperate fully with Degree Wellness's representatives, agents, and independent accountants during any inspection or audit and must pay any underpayment found, along with interest at the rate specified in the agreement. Degree Wellness also states that they will comply with all laws and regulations applicable to them relating to any personal health information of your patients, as set forth in the business associate agreement that you must sign with them.
These inspection and audit rights are typical in franchising, allowing Degree Wellness to maintain brand standards and ensure franchisees are adhering to the established system. Prospective franchisees should understand that these inspections are a regular part of the franchise relationship and should be prepared to maintain accurate records and comply with all requests for information.