Am I required to cooperate with Golden Krust Caribbean Restaurant's representatives during an audit?
Golden_Krust_Caribbean_Restaurant Franchise · 2024 FDDAnswer from 2024 FDD Document
We have the right at any time during your business hours, and without prior notice to you, to inspect and audit, or cause to be inspected and audited, your (if you are a corporation, limited liability company or partnership) and the Restaurant's business, bookkeeping and accounting records, sales and income tax records and returns and other records. You agree to cooperate fully with our representatives and independent accountants we hire to conduct any such inspection or audit. In the event such inspection or audit is made necessary by your failure to furnish reports, supporting records or other information as herein required, or to furnish such items on a timely basis, or in the further event that the audit reveals that you have understated Gross Sales by two percent (2%) or more, you agree to reimburse us for the cost of such inspection or audit, including, without limitation, the charges of attorneys and independent accountants and the travel expenses, room and board and compensation of our employees. The foregoing remedies are in addition to our other remedies and rights under this Agreement and applicable law.
Source: Item 22 — CONTRACTS (FDD page 35)
What This Means (2024 FDD)
According to Golden Krust Caribbean Restaurant's 2024 Franchise Disclosure Document, as a franchisee, you are required to cooperate fully with the company's representatives and independent accountants during any inspection or audit of your business. This includes providing access to your restaurant's business, bookkeeping, and accounting records, as well as sales and income tax records.
If an audit is triggered because you failed to provide required reports, supporting records, or other information on time, or if the audit reveals that you understated gross sales by 2% or more, you will be responsible for reimbursing Golden Krust Caribbean Restaurant for the costs associated with the inspection or audit. These costs may include charges from attorneys and independent accountants, as well as travel expenses, room and board, and compensation for the company's employees.
This requirement to cooperate and potential financial responsibility for audit costs underscores the importance of maintaining accurate and transparent financial records and adhering to the reporting requirements outlined in the franchise agreement. Failing to do so can result in additional expenses and potential disputes with Golden Krust Caribbean Restaurant.