Who is responsible for the expenses associated with collecting and delivering documents requested by FSI for a Fat Shack audit?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee shall maintain its books and records relating to its FAT SHACK Restaurant for at least five years after the fiscal year to which they relate. FSI or its designated representatives may inspect and/or audit such records, or any other records of Franchisee or any party affiliated with Franchisee, including but not limited to Franchisee's General Manager and Managing Owner, and all other owners of Franchisee, other guarantors, officers, or directors, any immediate family members of Franchisee or of such affiliated parties, or any companies or entities associated with Franchisee or such affiliated parties, that FSI in its sole discretion determines may be relevant in determining the business results of Franchisee's FAT SHACK Restaurant; such as verifying that Franchisee has paid all fees owed to FSI. Any such inspection or audit shall be conducted at FSI's expense, except that Franchisee will be responsible for any expenses associated with collecting and delivering any documents requested by FSI for its inspection or audit.
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, the franchisee is responsible for the expenses associated with collecting and delivering documents requested by FSI (Fat Shack International) for an audit.
Specifically, Fat Shack or its representatives may inspect and audit the franchisee's records. These records can include tax returns, financial statements, and bank statements. While Fat Shack typically bears the cost of conducting the audit itself, the franchisee is responsible for the costs of gathering and submitting the necessary documentation.
This means that if Fat Shack requests specific documents for an audit, the franchisee must cover any costs incurred in collecting and delivering those documents, such as photocopying, postage, or delivery services. This allocation of responsibility is fairly standard in franchising, as it ensures the franchisor can access necessary financial information without incurring undue costs, while the franchisee remains accountable for providing accurate and complete records.