Is an Azal Coffee franchisee's use of the Franchise Technology at their own risk?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
We may require or authorize you to use certain technology in connection with the Franchise Business, which may include websites, point of sale and customer management systems (which may include computer hardware, software, mobile applications, web-based systems, licenses to use proprietary software or systems, etc.), intranet, extranet, web-based systems, other electronic media, and/or other technology specified by us (the "Franchise Technology"). Uses of the Franchise Technology may include advertising for all Azal Coffees, lists of Azal Coffees, on-line ordering, inventory control for Stores, entering sales and other information, projecting sales, reviewing reports, placing orders with suppliers, posting the Brand Standards Manual and communication between us, franchisees and customers. You must acquire and use the Franchise Technology specified by us in the Franchise Business and in the manner specified by us. Your access to and use of the Franchise Technology is subject to your compliance with the terms and conditions of use and other policies and procedures specified by us. You agree to comply with those terms, conditions, policies and procedures. You must pay all required license fees, service fees, management fees, and support, maintenance, update, and upgrade costs to use and maintain the Franchise Technology in the manner specified by us. We may change or modify the Franchise Technology in the future, including changes in the specifications and components relating to the Franchise Technology. In that case, you must obtain and begin to use the changed or modified Franchise Technology within thirty (30) days after you receive written notice from us.
Source: Item 22 — CONTRACTS (FDD page 51)
What This Means (2024 FDD)
Based on the 2024 Franchise Disclosure Document, Azal Coffee franchisees are required to use specific technology in their franchise business, which may include websites, point of sale systems, customer management systems, and other electronic media. The franchisor, Azal Coffee, maintains the right to change or modify this technology in the future, and franchisees are obligated to adopt these changes within thirty days of receiving written notice. Franchisees must also cover all associated costs, including license fees, service fees, and maintenance expenses, to keep the technology operational as specified by Azal Coffee. The FDD does not explicitly state that the franchisee's use of technology is at their own risk. However, franchisees must comply with the terms, conditions, policies, and procedures set by Azal Coffee for using the Franchise Technology.
While the FDD outlines the franchisee's obligations to use and maintain the specified technology, it does not specify who bears the risk associated with the use of the Franchise Technology. This could include risks related to system failures, data breaches, or other technical issues. The agreement stipulates that franchisees must use the technology as directed by Azal Coffee and bear the costs of updates and maintenance, but it remains unclear whether franchisees are liable for losses or damages resulting from the use of this technology.
A prospective Azal Coffee franchisee should seek clarification from the franchisor regarding liability for any risks associated with the use of the Franchise Technology. Understanding the allocation of risk is crucial for assessing the potential financial and operational impact on the franchise. It would be prudent to inquire about insurance coverage, security measures, and support systems in place to mitigate these risks.