Under what conditions can Petro Stopping Center inspect and audit a franchisee's operations?
Petro_Stopping_Center Franchise · 2025 FDDAnswer from 2025 FDD Document
- 15.1 Our Right to Inspect the Petro Center. To determine whether you and the Petro Center are complying with this Agreement and all Petro System Standards, we and our designated agents have the right at any time during your regular business hours, and without prior notice to you, to:
- (a) inspect the Petro Center and any other aspect of or facility used by the Petro Center (if any);
- (b) observe, photograph and videotape the operations of the Petro Center and any other aspect of or facility used by the Petro Center for such consecutive or intermittent periods as we deem necessary;
- (c) remove samples of any products, materials or supplies for testing and analysis;
- (d) interview Personnel and customers of the Petro Center and engage in "secret shopper" type programs; and (e) inspect and copy any books, records, tax returns and documents relating to your operation of the Petro Center.
You agree to cooperate with us fully in connection with any such inspections, observations, photographing, videotaping, product removal and interviews. You agree to present to your customers such evaluation forms that we periodically prescribe and to participate and/or request your customers to participate in any surveys performed by us or on our behalf. You must immediately correct or repair any unsatisfactory conditions we specify.
- 15.2 Our Right to Audit. 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 Petro Center, bookkeeping and accounting records, sales and 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. You must immediately pay us any shortfall in the amounts you owe us (regardless of the degree), including late fees and interest. 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 if:
- (a) our inspection or audit is made necessary by your failure to furnish reports, supporting records or other information we require, or to furnish such items on a timely basis; and/or
- (b) our audit or inspection reveals that you understated Gross Sales by over 2%.
- (a) our inspection or audit is made necessary by your failure to furnish reports, supporting records or other information we require, or to furnish such items on a timely basis; and/or
The foregoing remedies are in addition to our other remedies and rights under this Agreement and applicable law.
Source: Item 14 — Other investments (FDD pages 131–208)
What This Means (2025 FDD)
According to Petro Stopping Center's 2025 Franchise Disclosure Document, Petro Stopping Center has the right to inspect a franchisee's Petro Center at any time during regular business hours without prior notice to ensure compliance with the Franchise Agreement and Petro System Standards. These inspections may include observing, photographing, and videotaping operations; removing product samples for testing; interviewing personnel and customers; and inspecting and copying books, records, and tax returns. Franchisees must cooperate fully with these inspections and correct any unsatisfactory conditions specified by Petro Stopping Center.
Petro Stopping Center also has the right to audit a franchisee's Petro Center, bookkeeping and accounting records, sales and tax records, and other records at any time during business hours without prior notice. Franchisees must cooperate fully with Petro Stopping Center's representatives and independent accountants during these audits.
A franchisee is responsible for covering the costs of inspections or audits if they failed to furnish required reports or information on time, or if the audit reveals that they understated gross sales by over 2%. Franchisees must immediately pay Petro Stopping Center any shortfall in amounts owed, including late fees and interest. These rights are in addition to any other remedies Petro Stopping Center has under the Franchise Agreement and applicable law.