What type of audits should be performed for franchisors?

In California, franchisors should perform a range of audits to make sure they are in compliance with state franchise laws. As part of the required audit, franchisors must perform a financial audit each year. This audit should include an examination of records such as bank accounts, financial statements, and other documents to ensure that the franchisor is accurately reporting all income and expenses. Additionally, franchisors must perform a franchise audit to ensure all franchisees comply with the terms of their franchise agreement. This audit should analyze policies, procedures, and documents such as franchise agreements, franchise manuals, and marketing plans. Finally, franchisors must also perform a compliance audit to check for compliance with applicable state, federal, and local laws. This audit should check to make sure franchisees are properly paying taxes, adhering to labor laws, and following other regulations. All of these audits help to ensure that franchisors are running their businesses in a lawful and ethical manner and are able to provide franchisees with quality product and services.

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