What must a 1 800 Packouts franchisee use in the development and operation of the Franchised Business?
1_800_Packouts Franchise · 2025 FDDAnswer from 2025 FDD Document
cility that is constructed in accordance with plans that we approve.
Management Systems. You must use in the development and operation of the Franchised Business the Management System that we specify from time to time. As part of the Management Systems, we may require you to obtain specified computer hardware, mobile devices, and/or applications or software,
including, without limitation, a license to use proprietary software developed by us or others. We may also require that all or parts of the Management Systems be purchased or contracted through us or our designee. The Management Systems we require provide a business advantage over other systems and allow us to ensure uniformity across the franchise system. In addition, some third party administrators (TPAs) will require use of certain software, if this occurs we reserve the right to require you to use the software the TPA is requiring.
Insurance. You must obtain and maintain in force insurance coverage necessary to comply with all laws and as is customary for similar businesses in the state or jurisdiction in which the Franchised Business operates or as we may reasonably prescribe from time to time. We currently require you to maintain the following insurance coverage: (i) commercial general liability insurance ($1 million per occurrence, $2 million general aggregate limit, and $2 million products-completed operations limit, (ii) contractor's environmental liability ($1 million per occurrence and $2 million aggregate limit (aggregate may be shared with CGL policy)), (iii) property insurance (100% of replacement value of Facility and contents), (iv) bailee legal liability coverage ($1 million limit), (v) vehicle liability insurance ($1 million coverage, including hired and non-company owned auto coverage), (vi) workers' compensation coverage, (vii) cyber liability coverage ($1 million limit), (viii) employment practices liability coverage ($1 million limit), and (ix) excess liability coverage (over and above CGL, vehicle liability and employer liability) of $1 million. The insurance coverage must be maintained under one or more policies of insurance of the types and containing such terms and conditions and minimum liability protection in such amounts, as we specify and as are issued by insurance carriers rated not less than "A-" by A.M. Best Company.
You must maintain these policies during the entire term of your Franchise Agreement. We may increase or decrease the amounts of coverage required under these insurance policies and require different or additional kinds of insurance at any time to reflect inflation, identification of new risks, changes in law or standards of liability, higher damage awards or other relevant changes in circumstances.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 27–29)
What This Means (2025 FDD)
According to 1 800 Packouts's 2025 Franchise Disclosure Document, franchisees must use the Management System that 1 800 Packouts specifies for the development and operation of the Franchised Business. This system may require franchisees to obtain specific computer hardware, mobile devices, and/or applications or software, potentially including a license to use proprietary software developed by 1 800 Packouts or others. 1 800 Packouts may also require that all or parts of the Management Systems be purchased or contracted through them or their designee. The reason for this requirement is that 1 800 Packouts believes these Management Systems provide a business advantage and ensure uniformity across the franchise system. Additionally, some third-party administrators (TPAs) may require the use of certain software, and in such cases, 1 800 Packouts reserves the right to require franchisees to use that specific software.
1 800 Packouts also mandates that franchisees offer all services and products that 1 800 Packouts prescribes for a Franchised Business and prohibits franchisees from offering or selling any services or products that 1 800 Packouts has not approved in writing. These specifications may change periodically, and 1 800 Packouts may designate specific products or services as either optional or mandatory. Franchisees must offer all products or services that 1 800 Packouts designates as mandatory and must sell products only in approved varieties, forms, and packages. Furthermore, franchisees must maintain a sufficient supply of required products to meet the inventory standards prescribed in the manuals or to meet reasonably anticipated customer demand if specific standards have not been prescribed.
1 800 Packouts has the right to require that furniture, fixtures, signs, and equipment (referred to as "Operating Assets") and products, supplies, software, and other services purchased or leased for use in the Franchised Business meet certain conditions. These conditions include meeting specifications established by 1 800 Packouts, being a specific brand, kind, or model, being purchased or leased only from 1 800 Packouts or its affiliates or expressly approved suppliers or service providers, and/or being purchased or leased only from a single designated source, which may include 1 800 Packouts or its affiliates or a buying cooperative organized by them. 1 800 Packouts estimates that the cost to purchase and lease all equipment, inventory, and other items and services that franchisees are required to obtain from 1 800 Packouts or its affiliates, from designated suppliers, or in accordance with their specifications ranges from 90% to 100% of the total cost to establish and operate a Franchised Business.