Who owns the Business Management System Data as between the Beard Papas franchisee and franchisor?
Beard_Papas Franchise · 2025 FDDAnswer from 2025 FDD Document
Supplementing the foregoing, Franchisee agrees that the Business Management System will contain proprietary and confidential information owned by Franchisor and related to the System, and that:
(1) Franchisee shall use the Business Management System and the Business Management System Data for the exclusive benefit of the Franchised Business and in accordance with the terms of this Agreement and Franchisor's standards and specifications as set forth in the Operations Manual;
(2) All rights in and to the Business Management System are non-transferable and non-assignable to Franchisee and shall be utilized by Franchisee subject to the terms and conditions of this Agreement, Business Management System licenses that Franchisor may approve of and otherwise as determined by Franchisor in Franchisor's Reasonable Business Judgment;
(3) As between Franchisee and Franchisor, Franchisor is and shall be the exclusive owner of the Business Management System Data, except that Franchisee shall store and maintain such data in accordance with all applicable local, state and federal privacy, data collection and solicitation laws.
Among other things, upon expiration or termination of this Agreement for any reason, Franchisee shall preserve and maintain the Business Management System data for the purpose of transferring such data to Franchisor;
(4) At all times, Franchisee shall provide and permit Franchisor to maintain direct and independent access to the Business Management System and Franchisee shall electronically transfer and transmit to Franchisor all Business Management System Data;
(5) When instructed by Franchisor, Franchisee shall upgrade, replace and modify the Business Management System;
(6) Franchisee shall promptly disclose to Franchisor all ideas and suggestions for modifications or enhancements to the Business Management System, to the configuration and templates associated with the Business Management System and that Franchisor shall have the right to use such ideas and suggestions and that Franchisee shall not receive or obtain any ownership rights or interests in any modifications or enhancements to the Business Management System;
(7) Other than permitting access to employees of the Franchised Business for the purpose of conducting the authorized operations of the Franchised Business, Franchisee shall not permit nor allow any third party to access, utilize or duplicate the Business Management System or the Business Management System Data without Franchisor's prior written consent;
Source: Item 23 — RECEIPTS (FDD pages 58–275)
What This Means (2025 FDD)
According to Beard Papas's 2025 Franchise Disclosure Document, the franchisor retains exclusive ownership of the Business Management System Data. The Business Management System encompasses the software, internet-based systems, point-of-sale systems, and customer relationship management systems designated by Beard Papas for use in the franchised business. The Business Management System Data includes forms, data, tools, customer information, inventory, and sales information entered into or maintained by the system.
While the franchisee uses the Business Management System and its data for the benefit of their Beard Papas franchise, they do so under the terms of the franchise agreement and according to Beard Papas's standards. The franchisee's rights to the system are non-transferable and non-assignable. The franchisee is also responsible for storing and maintaining this data in compliance with privacy and data collection laws.
Upon the expiration or termination of the franchise agreement, the franchisee must preserve the Business Management System data for transfer back to Beard Papas. The franchisee must also provide Beard Papas with direct access to the system and transmit all Business Management System Data electronically. Furthermore, the franchisee is obligated to implement any upgrades, replacements, or modifications to the system as instructed by Beard Papas. This ensures that Beard Papas maintains control over its proprietary information and can continue to develop and refine its business systems.