Can Spray Net audit the books and records of the Spray Net franchised business?
Spray_Net Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisor and its designated agents shall have the right to examine and audit Franchisee's records, accounts, books, computer files and data, including the any proprietary software used in connection with the System, at all reasonable times to ensure that Franchisee is complying with the terms of this Agreement.
If such audit discloses that Franchisee has underreported the Gross Sales of the Franchised Business (or any amount due to Franchisor) in any given reporting period (weekly, monthly or otherwise), then Franchisee must: (i) reimburse Franchisor any costs/expenses incurred in connection with conducting the inspection and audit; and (ii) immediately pay any amount due and owing Franchisor as a result of Franchisee's underreporting, along with any accrued interest on said amounts.
- C. Computer System for Records.
Franchisee shall record all transactions of the Franchised Business on a Computer System designated or approved by Franchisor, which must contain software that allows Franchisee to record accumulated sales without turning back, resetting or erasing such sales.
Franchisor will, at all times and without notice to Franchisee, have the right to independently and remotely access and view Franchisee's Computer System as described in Section 4(C) of this Agreement.
Franchisor shall at all times have administrative rights to Franchisee's accounting software (i.e., QuickBooks, etc.).
- D. Computer System Files and Passwords.
Franchisee shall not install or load any computer software on the hard disks of the Computer System used in connection with the Franchised Business without Franchisor's prior written consent.
All computer and file passwords associated with the Computer System must be supplied as a list to Franchisor by Franchisee, along with any modifications or changes to that list.
The passwords to access the Computer System located at the Premises or used by the Franchised Business, as well as all computer files and records related to the Franchised Business, are the exclusive property of Franchisor and Franchisee must provide Franchisor with these files and information upon the termination or expiration of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 75–219)
What This Means (2025 FDD)
According to Spray Net's 2025 Franchise Disclosure Document, Spray Net has the right to examine and audit a franchisee's records. Spray Net or its designated agents can examine and audit the franchisee's records, accounts, books, computer files, and data, including any proprietary software used in connection with the Spray Net system. This audit can occur at all reasonable times to ensure the franchisee complies with the terms of the Franchise Agreement.
If the audit reveals that the franchisee has underreported gross sales or any amount due to Spray Net during any reporting period (weekly, monthly, or otherwise), the franchisee must reimburse Spray Net for all costs and expenses incurred during the inspection and audit. Additionally, the franchisee must immediately pay any amount owed to Spray Net due to the underreporting, along with any accrued interest on those amounts.
Spray Net also has the right to independently and remotely access and view the franchisee's computer system at all times and without notice. Furthermore, Spray Net has administrative rights to the franchisee's accounting software, such as QuickBooks. The franchisee is required to record all transactions on a computer system designated or approved by Spray Net, with software that prevents the resetting or erasing of accumulated sales records. All computer and file passwords associated with the computer system must be provided to Spray Net, and these files and records are the exclusive property of Spray Net upon termination or expiration of the Franchise Agreement.