What section of the Dryject Franchise Agreement outlines inspections and audits?
Dryject Franchise · 2025 FDDAnswer from 2025 FDD Document
You shall also submit to Us Your current financial statement and other forms, records, reports, information and data as We may reasonably designate, in the form, and at the times and the places reasonably required by Us, upon request, and as specified from time to time in the Operations Manual or otherwise in writing.
(c) You shall permit Our authorized personnel to inspect, examine, compile, review and/or audit all of Your business records relating to Your Franchised Business, including but not limited to financial documents and tax returns, at any time during normal business hours without any prior notice.
(d) You shall also permit accountants designated by Us to audit Your books of accounts. In the event that We find that You have understated the amount due to Us and that any such understatement has been made deliberately, such understatement shall constitute an Event of Default and be considered a Material Breach of this Agreement as defined in Section 32(d)(iv) of this Agreement. Should any audit reveal an understatement of five percent (5%) or more of the amount otherwise due to Us, or if the understatement is determined to be deliberate, You will bear the costs and expenses of Our audit and inspection, and the deficiency shall be immediately due and payable with interest from the date the payments should have been made.
(e) Any inspection or audit of business records or books of accounts is solely for determining Your compliance with Your contractual obligations and does not constitute control over Your dayto-day operation of the Franchised Business.
(f) The provisions of this Section 22 shall survive the termination or expiration of this Agreement.
Source: Item 9 — FRANCHISEE'S OBLIGATIONS (FDD pages 25–26)
What This Means (2025 FDD)
According to Dryject's 2025 Franchise Disclosure Document, Section 22 of the Franchise Agreement details the inspections and audits that Dryject may perform on a franchisee's business. Specifically, Dryject's authorized personnel have the right to inspect, examine, compile, review, and/or audit all of the franchisee's business records, including financial documents and tax returns, at any time during normal business hours without prior notice.
This section also allows Dryject to designate accountants to audit the franchisee's books of accounts. If an audit reveals that the franchisee has understated the amount due to Dryject, and the understatement was deliberate, it constitutes an Event of Default and a Material Breach of the Agreement.
Furthermore, if any audit reveals an understatement of five percent (5%) or more of the amount due, or if the understatement is determined to be deliberate, the franchisee will bear the costs and expenses of Dryject's audit and inspection. The deficiency becomes immediately due and payable with interest from the date the payments should have been made. The FDD clarifies that these inspections and audits are solely for determining compliance with contractual obligations and do not constitute control over the day-to-day operation of the Franchised Business. The obligations outlined in Section 22 survive the termination or expiration of the Franchise Agreement.