What sections of the Fly To Fit agreement are referenced regarding audits and inspections?
Fly_To_Fit Franchise · 2024 FDDAnswer from 2024 FDD Document
ion. Fly To Fit Franchise may inform Franchisee thereof by any method that Fly To Fit Franchise deems appropriate (which need not qualify as "notice" under Section 18.9). In the event of any dispute as to the contents of the Manual, Fly To Fit Franchise's master copy will control.
- 11.2 Inspections. Fly To Fit Franchise may enter the premises of the Business from time to time during normal business hours and conduct an inspection. Franchisee shall cooperate with Fly To Fit Franchise's inspectors. The inspection may include, but is not limited to, observing operations, conducting a physical inventory, evaluating physical conditions, monitoring sales activity,
speaking with employees and customers, and removing samples of products, supplies and materials. Fly To Fit Franchise may videotape and/or take photographs of the inspection and the Business. Fly To Fit Franchise may set a minimum score requirement for inspections, and Franchisee's failure to meet or exceed the minimum score will be a default under this Agreement. Without limiting Fly To Fit Franchise's other rights under this Agreement, Franchisee will, as soon as reasonably practical, correct any deficiencies noted during an inspection. If Fly To Fit Franchise conducts an inspection because of a governmental report, customer complaint or other customer feedback, or a default or non-compliance with any System Standard by Franchisee (including following up a previous failed inspection), then Fly To Fit Franchise may charge all out-of-pocket expenses plus its then-current inspection fee to Franchisee.
- 11.3 Fly To Fit Franchise's Right to Cure. If Franchisee breaches or defaults under any provision of this Agreement, Fly To Fit Franchise may (but has no obligation to) take any action to cure the default on behalf of Franchisee, without any liability to Franchisee. Franchisee shall reimburse Fly To Fit Franchise for its costs and expenses (including the allocation of any internal costs) for such action, plus 10% as an administrative fee.
- 11.4 Right to Discontinue Supplies Upon Default. While Franchisee is in default or breach of this Agreement, Fly To Fit Franchise may (i) require that Franchisee pay cash on delivery for products or services supplied by Fly To Fit Franchise, (ii) stop selling or providing any products and services to Franchisee, and/or (iii) request any third-party vendors to not sell or provide products or services to Franchisee.
Source: Item 22 — CONTRACTS (FDD page 44)
What This Means (2024 FDD)
According to the 2024 Fly To Fit Franchise Disclosure Document, several sections of the franchise agreement pertain to audits and inspections. Fly To Fit has the right to inspect the premises of the business during normal business hours, and the franchisee is expected to cooperate with these inspections. These inspections may include observing operations, conducting physical inventories, evaluating the physical condition of the premises, monitoring sales activity, speaking with employees and customers, and even removing samples of products. Fly To Fit is also allowed to videotape and/or take photographs during the inspection.
Fly To Fit may set a minimum score requirement for inspections, and failure to meet this score can result in a default under the agreement. The franchisee is responsible for correcting any deficiencies noted during an inspection as soon as reasonably practical. If an inspection is conducted due to a governmental report, customer complaint, or the franchisee's non-compliance with System Standards, Fly To Fit may charge the franchisee for all out-of-pocket expenses, plus an inspection fee.
Fly To Fit also has the right to examine and audit all books and records related to the business at any reasonable time. This audit can be conducted at the franchise location or at a location designated by Fly To Fit, to which the franchisee must deliver copies of the necessary documents. The franchisee may be required to reimburse Fly To Fit for all costs and expenses of the examination or audit if the audit was initiated due to the franchisee's failure to submit required reports or non-compliance with the System, or if the audit reveals that the franchisee understated Gross Sales by 3% or more for any 4-week period. Franchisees must also provide 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.