How often can Fitstop audit a franchisee's financial information?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
ired by us into machine readable information compatible with the system operated by us.
- 6.10 Right to Audit and/or Inspect. In addition, we reserve the right to audit your financial information quarterly upon reasonable demand and require that you provide to us on or before April 15 of each year a copy of the Franchise's financial statements, including profit and loss statements, that are reasonably requested by us.
- 6.11 Required Software (including CMS) and Use of Approved Supplier for Billing/Collection and Point of Sale (POS) Software and/or Services. You must at your cost: (1) acquire and install the software necessary to access the CMS, as well as any other cloud-based or other software program, we require you license and/or use in connection with your Franchised Business (collectively, the "Required Software"); (2) pay all fees and costs to our then-current Approved Supplier, for such Required Software;
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, Fitstop reserves the right to audit a franchisee's financial information quarterly upon reasonable demand. Additionally, franchisees are required to provide Fitstop with a copy of the franchise's financial statements, including profit and loss statements, by April 15th of each year. These financial statements must be those reasonably requested by Fitstop.
This means that Fitstop has the ability to check a franchisee's financials multiple times per year. The quarterly audits, conducted upon reasonable demand, allow Fitstop to monitor the financial health and performance of the franchise more closely. The annual submission of financial statements provides a comprehensive overview of the franchise's financial standing for the year.
For a prospective Fitstop franchisee, this highlights the importance of maintaining accurate and organized financial records. Franchisees should be prepared to provide financial information to Fitstop on a quarterly basis if requested and must ensure that their annual financial statements are submitted on time. Failure to comply with these requirements could potentially lead to issues with the franchisor.
It is also important to note that Fitstop can inspect or audit a franchisee's payroll records, employee entitlements, or other related labor or employment records if reasonably requested. If Fitstop undertakes an audit under this section, the franchisee will be responsible for paying Fitstop's reasonable costs.