Which sections of the Floyds 99 Franchise Agreement address inspections and audits?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
important to the Franchisor and other FLOYD'S 99 system franchisees and is necessary to protect the reputation and goodwill of the Marks and to maintain a uniform quality of operation throughout the FLOYD'S 99 system. However, while the Operations Manual is designed to protect the reputation and goodwill of the Marks, it is not designed to control the day-to-day operation of the FLOYD'S 99 Shop.
- 14.3 Inspections. The Franchisor shall have the right to examine the Franchised Location, including the services offered and the manner in which those services are provided, inventory, products, equipment, furniture, fixtures, materials, supplies or services used or sold there, to ensure compliance with all standards and specifications set by the Franchisor. The Franchisor shall conduct such inspections during regular business hours and the Franchisee may be present at such inspections. The Franchisor, however, reserves the right to conduct the inspections without prior notice to the Franchisee.
- 14.4 Restrictions on Products and Services. The Franchisee is prohibited from offering or selling any products or services not authorized by the Franchisor as being a part of the Licensed Methods.
Source: Item 9 — FRANCHISEE'S OBLIGATIONS (FDD pages 29–30)
What This Means (2025 FDD)
According to the 2025 Floyds 99 Franchise Disclosure Document, Section 14.3 of the Franchise Agreement covers inspections. This section grants Floyds 99 the right to examine the franchised location, the services offered, and related items to ensure compliance with their standards and specifications. Floyds 99 can conduct these inspections during regular business hours, and while the franchisee may be present, Floyds 99 also reserves the right to perform inspections without prior notice.
Section 17.5 of the Floyds 99 Franchise Agreement pertains to audits of books and records. This section allows Floyds 99 to inspect and audit the franchisee's financial records at any reasonable time, with Floyds 99 initially bearing the expense. However, if an audit reveals a deficiency in payments owed to Floyds 99, the franchisee must immediately pay the outstanding amount, along with interest calculated from the original due date. The interest rate is set at the lesser of 1½% per month or the maximum rate permitted by law.
These sections of the Franchise Agreement are important for prospective franchisees to understand, as they outline the rights of Floyds 99 to monitor and assess the franchisee's compliance with the franchise agreement and system standards. Franchisees should be prepared to maintain accurate records and allow access for inspections and audits, and also understand the financial consequences of any discrepancies found during an audit.