What is a Fly To Fit franchisee required to disclose to the franchisor regarding the business?
Fly_To_Fit Franchise · 2024 FDDAnswer from 2024 FDD Document
- (c) Government Inspections. Franchisee shall give Fly To Fit Franchise copies of all inspection reports, warnings, certificates, and ratings issued by any governmental entity with respect to the Business, within three days of Franchisee's receipt thereof.
- (d) Other Information. Franchisee shall submit to Fly To Fit Franchise such other financial statements, budgets, forecasts, reports, records, copies of contracts, documents related to litigation, tax returns, copies of governmental permits, and other documents and information related to the Business as specified in the Manual or that Fly To Fit Franchise may reasonably request.
- 10.3 Initial Investment Report. Within 120 days after opening for business, Franchisee shall submit to Fly To Fit Franchise a report detailing Franchisee's investment costs to develop and open the Business, with costs allocated to the categories described in Item 7 of Fly To Fit Franchise's Franchise Disclosure Document and with such other information as Fly To Fit Franchise may request.
- 10.4 Business Records. Franchisee shall keep complete and accurate books and records reflecting all expenditures and receipts of the Business, with supporting documents (including, but not limited to, payroll records, payroll tax returns, register receipts, production reports, sales invoices, bank statements, deposit receipts, cancelled checks and paid invoices) for at least three years. Franchisee shall keep such other business records as Fly To Fit Franchise may specify in the Manual or otherwise in writing.
- 10.5 Records Audit. Fly To Fit Franchise may examine and audit all books and records related to the Business, and supporting documentation, at any reasonable time. Fly To Fit Franchise may conduct the audit at the Location and/or require Franchisee to deliver copies of books, records and supporting documentation to a location designated by Fly To Fit Franchise. Franchisee shall also reimburse Fly To Fit Franchise for all costs and expenses of the examination or audit if (i) Fly To Fit Franchise conducted the audit because Franchisee failed to submit required reports or was otherwise not in compliance with the System, or (ii) the audit reveals that Franchisee understated Gross Sales by 3% or more for any 4-week period.
Source: Item 22 — CONTRACTS (FDD page 44)
What This Means (2024 FDD)
According to Fly To Fit's 2024 Franchise Disclosure Document, franchisees have several ongoing disclosure obligations to Fly To Fit. Within 120 days of opening, a franchisee must submit a report detailing their investment costs, allocating expenses to categories outlined in Item 7 of the FDD, along with any other information Fly To Fit requests. Franchisees must also maintain complete and accurate financial records for at least three years, including payroll documents, sales invoices, bank statements, and other supporting documentation. These records must be kept according to specifications in the manual or in writing from Fly To Fit.
Fly To Fit retains the right to audit these business records at any reasonable time, either at the franchise location or by requiring the franchisee to submit copies of the documents. If an audit is triggered by the franchisee's non-compliance or reveals an understatement of gross sales by 3% or more for any 4-week period, the franchisee is responsible for reimbursing Fly To Fit for all audit expenses. Franchisees are also obligated to provide copies of all inspection reports, warnings, certificates, and ratings issued by any governmental entity within three days of receipt.
Beyond financial and compliance-related documents, Fly To Fit franchisees must also provide other information related to the business as specified in the manual or reasonably requested by Fly To Fit. This includes financial statements, budgets, forecasts, reports, copies of contracts, documents related to litigation, tax returns, and copies of governmental permits. Franchisees must also provide documents and information related to any legal action against the Business. Furthermore, franchisees are required to grant Fly To Fit unlimited access to their point of sale system and other software systems used in the Business, using means designated by Fly To Fit.