Records. Franchisee shall, in a manner satisfactory to Sub Zero, and in accordance with generally accepted accounting principles, maintain original, POS digital files, vendor receipts, other records, accounts, books, data, licenses, contracts and supplier invoices (collectively “Records”) that accurately reflect all particulars relating to Franchisee’s business and such statistical and other information or records as Sub Zero may require, during the term of this Agreement and for two (2) years after termination or expiration hereof. Upon Sub Zero’s request, Franchisee shall furnish Sub Zero with copies of any or all product supply invoices reflecting purchases by or on behalf of the Franchise. In addition, Franchisee shall compile and provide to Sub Zero any statistical or financial information regarding the operation of the Franchise, the products and services sold by it, or data of a similar nature including, without limitation, any financial data, as Sub Zero may reasonably request for purposes of evaluating or promoting the Franchise or Sub Zero Stores or Mobile Operations or Catering Franchises in general. You shall use our standard chart of accounts in all bookkeeping and accounting for the Franchise. We may designate specific systems and software and specific vendors that you must use to operate the Franchise and to report business and financial information to us, including without limitation monthly and periodic sales, cost of goods and services, key performance indicators, customers, and events. All data provided to Sub Zero under this Section 7 shall belong to Sub Zero and may be used and published by Sub Zero in connection with the Sub Zero Stores, Mobile Operations, and Catering Franchise.
Electronic Access. Sub Zero may designate certain systems, including electronic systems and software that provide access to Sub Zero, to be used in the maintenance of the Records and reporting. Such systems may have components or software that is available only through Sub Zero, an affiliate or designated suppliers at a fee. Franchisee acknowledges and agrees that Sub Zero has the right to access and use all such electronic Records, reports, and the information and data that are contained therein.
Electronic Funds Transfer. Franchisee agrees to participate in Sub Zero’s then-current electronic funds transfer and reporting program(s). Franchisee authorizes Sub Zero to initiate debit entries and/or credit collection entries to Franchisee’s designated primary business operating checking or savings account (“Designated Account”) for the payment of all fees, royalties or other amounts due hereunder to Sub Zero or its affiliates. Franchisee shall, at its sole cost and expense, instruct its bank to pay all fees, royalties or other amounts due hereunder to Sub Zero or its affiliates directly from the Designated Account, and promptly upon Sub Zero’s request, Franchisee shall execute or re-execute and deliver to Sub Zero a pre-authorized check form or such other instrument or draft Sub Zero’s bank may require. In connection with this requirement, Franchisee shall fill out and sign an Authorization for Electronic Funds Transfer form, in the form required by Sub Zero or such other form as the relevant financial institutions require. Franchisee shall ensure that sufficient funds are available in the Designated Account to make all payments due hereunder by Wednesday of each calendar week, or upon such date as provided in the Confidential Operating Manuals from time to time.
Weekly and Monthly Statements. Franchisee shall submit weekly revenue and fee reports as outlined in the Operating Manuals. No later than the fifth (5th) day of each month Sub Zero shall have Franchise Agreement received from Franchisee, on forms satisfactory to Sub Zero, statements detailing the fees and royalties due to Sub Zero during the preceding month itemized by revenue producing activity as specified from time to time by Sub Zero, the Gross Sales for the prior month and such other information as Sub Zero may require signed and certified as true and correct by an authorized agent of Franchisee.
Audit. Sub Zero and its designated agents shall have the right to examine and audit such Records, accounts, books and data upon reasonable notice and during regular business hours. If such inspection discloses that the Gross Sales during any scheduled reporting period exceeded the amount reported by Franchisee as its Gross Sales by three percent (3%) or more, then Franchisee shall bear the cost of such inspection and audit and shall immediately pay any such deficiency with interest from the date due at the lesser of 1.5% per month and the highest rate permitted by applicable law.
Financial Statements and Tax Reports. Upon Sub Zero’s request, Franchisee shall furnish Sub Zero with a copy of each of its reports and returns of sales, use and gross receipt taxes and complete copies of any state or federal income tax returns covering the operation of the Franchise, all of which Franchisee shall certify as true and correct. Upon request, Franchisee shall deliver to Sub Zero financial statements, including tax returns and profit and loss statements, in a form satisfactory to Sub Zero. In addition, within ninety (90) days after the close of each fiscal year of Franchisee, Franchisee shall furnish to Sub Zero, at Franchisee’s expense, a profit and loss statement prepared on an accrual basis for such fiscal year and a year-end balance sheet. Sub Zero will have the right to disclose data derived from such reports without identifying Franchisee or the address of the Franchise.