What records is Mr. Sandless permitted to inspect during an audit?
Mr_Sandless Franchise · 2025 FDDAnswer from 2025 FDD Document
16.3 Audits
We or our designee may inspect or conduct an audit of your accounts, business and financial books and records, local advertising records, tax returns and other records during regular business hours. If the audit discloses an understatement of Gross Sales for any period (s), you must immediately pay us all Royalty Fees, Advertising Fees and any other sums due under this Agreement, plus interest on these monies at the rate set forth in this Agreement. If any audit reveals that you have underreported any amounts by two percent (2%) or more in any period(s), or if you fail to timely submit complete, accurate and legible reports, then in addition to paying all monies due with interest thereon, you shall reimburse us for the cost of the audit, including the charges of any independent certified public accountant, attorneys' fees, other legal costs and the travel expenses, room, board and compensation of our employees.
Source: Item 22 — CONTRACTS (FDD page 42)
What This Means (2025 FDD)
According to Mr. Sandless's 2025 Franchise Disclosure Document, Mr. Sandless or their designee has the right to inspect or conduct an audit of a franchisee's accounts, business and financial books and records, local advertising records, tax returns, and other records during regular business hours.
If an audit reveals an understatement of Gross Sales for any period, the franchisee must immediately pay all Royalty Fees, Advertising Fees, and any other sums due under the Franchise Agreement, along with interest on these monies at the rate set forth in the agreement.
Furthermore, if any audit reveals that the franchisee has underreported any amounts by two percent or more in any period, or if the franchisee fails to submit complete, accurate, and legible reports in a timely manner, the franchisee will be responsible for reimbursing Mr. Sandless for the cost of the audit. This reimbursement includes charges from any independent certified public accountant, attorneys' fees, other legal costs, and the travel expenses, room, board, and compensation of Mr. Sandless's employees.