Can Baya Bar require franchisees to use a specific point of sale (POS) system?
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, Baya Bar franchisees are required to install and maintain a specific Point of Sale (POS) system, along with the necessary computer hardware and software. The franchisee bears the full expense of these installations and maintenance. Franchisees must also adhere to the procedures outlined in the Baya Bar manual or in writing.
Baya Bar can also mandate that franchisees set up and maintain systems and web-based payment processing accounts. These accounts must allow Baya Bar to access and retrieve any data stored within the franchisee's POS system, other computer systems, and payment processing accounts. This includes information related to Gross Revenue. Franchisees are obligated to sign documents that enable Baya Bar to access this information independently and electronically.
Furthermore, all customer data collected or provided by the franchisee, or retrieved from the franchisee's POS system, is owned exclusively 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 this 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 specific software license agreements for software developed or acquired for use within the Baya Bar system.
These stipulations are fairly typical in franchising, as franchisors often need to standardize operations and collect sales data. Prospective Baya Bar franchisees should carefully consider the costs associated with these technology requirements and the implications of data ownership before investing in a franchise.