Operations inspection

Definition

The franchisor's visit to the unit, whose report can itself be the notice of default.

Why It Matters

The outsider here is a private counterparty and its rights run wider than a regulator's: a typical agreement lets the franchisor inspect at any reasonable time without notice, photograph the operation, take product samples, and interview both staff and customers. The consequence is what makes it the sharpest check of the six. Under one filed agreement a failing score is itself a notice of default, and a second failure at the next inspection ends the agreement with no opportunity to cure. Ask for the last two reports and their scores, because the buyer inherits the sequence.