If Baya Bar establishes a POS System, can they require franchisees to use it?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
12.3 Computer Systems.
- 12.3.1 Franchisee, at Franchisee's sole expense, shall install and maintain the POS System and computer hardware and software Franchisor requires for the operation of the Franchised Business and shall follow the procedures related thereto that Franchisor specifies in the Manual or otherwise in writing.
- 12.3.2 Franchisor may require Franchisee, at Franchisee's sole expense, to install and maintain systems and web-based payment processing accounts that permit Franchisor to independently and electronically access and retrieve any information stored in Franchisee's POS System, other computer systems and web-based payment processing accounts, including, without limitation, information concerning Gross Revenue. Upon Franchisor's request, Franchisee shall execute such documents as Franchisor deems necessary to permit Franchisor to independently and electronically access and retrieve all information stored on Franchisee's POS System, other computer systems and web-based payment processing accounts.
- 12.3.3 Any and all customer data collected or provided by Franchisee, retrieved from Franchisee's POS System, or otherwise collected from Franchisee by Franchisor or provided to Franchisor, is and will be owned exclusively by Franchisor and will be considered to be Franchisor's proprietary and Confidential Information. Franchisor has the right to use such data in any manner without compensation to Franchisee. Franchisor licenses to Franchisee the use of such data solely for the purpose of operating the Franchised Business; provided that, this license shall automatically and irrevocably terminate, without any additional action or notice required by Franchisor, upon the expiration or earlier termination of this Agreement.
- 12.3.4 Franchisor may require Franchisee, at Franchisee's sole expense, to enter into software license agreements in the form that Franchisor requires for software Franchisor develops or acquires for use in the System.
Source: Item 22 — CONTRACTS (FDD page 56)
What This Means (2024 FDD)
According to Baya Bar's 2024 Franchise Disclosure Document, franchisees are required to install and maintain the POS (Point of Sale) system that Baya Bar specifies for operating their franchised business. This includes following all related procedures outlined in the manual or in writing. The franchisee bears the sole expense of this installation and maintenance.
Baya Bar also has the right to mandate that franchisees install and maintain systems and web-based payment processing accounts. These systems must allow Baya Bar to independently and electronically access and retrieve any information stored in the franchisee's POS system, other computer systems, and web-based payment processing accounts, including data concerning Gross Revenue. Franchisees must also execute any documents Baya Bar deems necessary to permit this access.
Furthermore, all customer data collected or provided by the franchisee, retrieved from the POS system, or otherwise collected from the franchisee by Baya Bar is exclusively owned by Baya Bar. Baya Bar has the right to use this data in any manner without compensating the franchisee. The franchisee is only licensed to use such data for operating the Franchised Business, and this license terminates upon the expiration or termination of the franchise agreement. Baya Bar can also require franchisees to enter into software license agreements for software developed or acquired for use within the Baya Bar system, at the franchisee's sole expense.
In practical terms, this means a Baya Bar franchisee must comply with Baya Bar's technology requirements, which include specific POS systems, hardware, and software. The franchisee is responsible for all costs associated with these systems and must grant Baya Bar access to all data generated by these systems. This level of control allows Baya Bar to monitor sales, customer data, and other critical business information, while ensuring uniformity across all franchise locations. Prospective franchisees should carefully consider these technology requirements and associated costs when evaluating the Baya Bar franchise opportunity.