Does Fitstop reserve the right to 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 retains the right to audit a franchisee's financial information. Specifically, Fitstop reserves the right to audit a franchisee's financial information quarterly upon reasonable demand.
Furthermore, Fitstop requires franchisees to provide a copy of the franchise's financial statements, including profit and loss statements, by April 15th of each year. These financial statements must be reasonably requested by Fitstop.
In addition to general financial audits, Fitstop also has the right to inspect or audit a franchisee's payroll records, employee entitlements, or other related labor or employment records if reasonably requested. If Fitstop undertakes such an audit, the franchisee is responsible for covering Fitstop's reasonable costs associated with the audit. The franchisee must also cooperate with any audit or investigation undertaken by any employment regulatory authority or Fitstop itself and provide all relevant information and documents at Fitstop's request. Franchisees must also certify annually that they are in compliance with all applicable workplace laws.
These audit rights are typical in franchising, allowing Fitstop to ensure compliance with the franchise agreement and maintain the integrity of the Fitstop system. However, the franchisee bears the cost of audits related to employment law compliance, which is a notable financial responsibility.