Are Better Blend franchisees charged for the license to use customer data?
Better_Blend Franchise · 2024 FDDAnswer from 2024 FDD Document
- **2.
Confidential Information.** With respect to all Confidential Information, Guarantor shall (a) adhere to all security procedures prescribed by BBF for maintaining confidentiality, (b) disclose such information to its employees only to the extent necessary for the operation of the Business, (c) not use any such information in any other business or in any manner not specifically authorized or approved in writing by BBF, (d) exercise the highest degree of diligence and make every effort to maintain the confidentiality of all such information during and after the term of the Franchise Agreement, (e) not copy or otherwise reproduce any Confidential Information, and (f) promptly report any unauthorized disclosure or use of Confidential Information.
Guarantor acknowledges that all Confidential Information is owned by BBF or its affiliates (except for Confidential Information which BBF licenses from another person or entity).
Guarantor
acknowledges that all customer data collected or generated by the Business and all data collected or generated by the point-of-sale system (other than data regarding employees) is Confidential Information belonging to BBF. This Section will survive the termination or expiration of the Franchise Agreement indefinitely.
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2024 FDD)
Based on the 2024 Better Blend Franchise Disclosure Document, there is no explicit mention of franchisees being charged a fee for the license to use customer data. However, the FDD does state that all customer data collected or generated by the Better Blend business, as well as data from the point-of-sale system (excluding employee data), is considered confidential information and belongs to Better Blend.
This means that while franchisees operate and collect this data, Better Blend retains ownership. Franchisees are obligated to adhere to security procedures to maintain the confidentiality of this information, disclose it only to employees on a need-to-know basis, and protect it from unauthorized use or disclosure. This obligation extends even after the franchise agreement terminates.
The FDD specifies that franchisees must participate in customer loyalty programs and incentive programs designated by Better Blend. Franchisees are also required to comply with Better Blend's procedures related to these programs. While franchisees must participate in these programs at their own expense, the FDD does not state that franchisees must pay for the customer data itself.
Prospective franchisees should seek clarification from Better Blend regarding the use of customer data, including whether there are any implicit costs associated with accessing or utilizing the data for marketing or operational purposes. It would be prudent to understand how Better Blend uses the collected customer data and what benefits, if any, franchisees receive from the franchisor's use of this data.