What assistance must a Fitstop franchisee provide during a financial document inspection?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
13.14 Certification of Records. You must, if requested by us, obtain your accountant's certification of any one or more of the financial documents before submission to us.
13.15 Inspection. You must permit an officer of ours and, if required by us, our auditor on twenty four (24) hours' notice in writing, to inspect and verify your financial documents.
You must give all necessary assistance, information and explanation so that our officer or auditor or both can carry out that inspection and verification and must permit and make available to the officer or auditor the facilities necessary to permit copies of those financial records to be taken.
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, if Fitstop requests an inspection of a franchisee's financial documents, the franchisee must provide all necessary assistance, information, and explanations to enable Fitstop's officer or auditor to conduct the inspection and verification. The franchisee must also provide the officer or auditor with the facilities needed to make copies of the financial records. Fitstop will provide twenty-four hours' notice in writing before the inspection.
This means a Fitstop franchisee must be prepared to fully cooperate with Fitstop or its auditor during a financial review. This includes answering questions, providing clarifications, and ensuring access to all relevant financial records and copying equipment. The franchisee should maintain organized and accurate financial records to facilitate the inspection process.
This requirement is fairly standard in franchising, as franchisors need to ensure that franchisees are accurately reporting their financial performance for royalty calculations and to maintain the integrity of the brand. Failure to comply with an inspection could result in penalties or even termination of the franchise agreement. The franchisee also must, if requested by Fitstop, obtain their accountant's certification of any one or more of the financial documents before submission to Fitstop.