What is the dependency between the Byrider Franchise Agreement and the Licensee's use of the Licensed System?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
- 9.4 Technology System Fees. Concurrently with the execution of this Agreement, Franchisee has executed the Byrider Software Services and User Agreement which is attached hereto as Exhibit D (the "Software Agreement"). The Company's technology system is made up of four components: 1) Byrider Proprietary Software, 2) off-the-shelf software, 3) hardware, 4) Software as a Service (SaaS) platforms from third party providers as well as public cloud-based platforms, and 5) dealer management system with integrated mandatory Customer Relations Management provided at no additional cost to Franchisee. The Customer Relations Management assists with Agency and Direct Consumer Complaints. When Franchisee's franchised location receives an Agency Complaint (such as Better Business Bureau, Attorney General, Consumer Financial Protection Bureau, Media, or Private Attorney), Franchisee must investigate the complaint, forward the complaint to the Company's Customer Service, and timely respond to the Agency; when Franchisee's franchised location receives a Direct Consumer Complaint (i.e., Customer Service phone/email), Franchisee will investigate the complaint, resolve it directly, and timely report the results to Customer Service detailing the resolution or action taken. The Company's Compliance Department administers the Customer Service mailbox and phone line and tracks the complaints and responses. Franchisee is responsible for investigating, taking corrective action, and resolving these complaints. Franchisee must license and use the Byrider technology system necessary to operate day-to-day business. Franchisee must pay the cost of the technology system to the appropriate vendor as shown on Exhibit D, Appendix B, upon receiving invoices. Exhibit D, Appendix A, identifies the items that are typically required per franchised location. The Company may at times allow for substitution of items in Appendix A at the request of Franchisee if a substitution will not materially impact the Company's delivery of services or support but is under no obligation to do so.
- 9.5 Reputation Management Fee. Franchisee is required to pay to the Company for reputation management texts performed by the Company or its designee.
Source: Item 23 — Receipts (FDD pages 88–335)
What This Means (2025 FDD)
According to Byrider's 2025 Franchise Disclosure Document, the Byrider Software Services and User Agreement is directly linked to the Franchise Agreement. The Software Agreement, outlined in Exhibit D, is executed concurrently with the Franchise Agreement, indicating that franchisees must agree to the terms of the software agreement to operate a Byrider franchise.
The license granted to the franchisee to access and use the Licensed System is explicitly subject to the terms and conditions of both the Software Agreement and the Franchise Agreement. This license allows franchisees to access the functions of the Licensed System, which are necessary to obtain services for their automobile sales business, and this access must align with the stipulations of the Franchise Agreement.
Furthermore, the Software Agreement's term is tied to the Franchise Agreement; it automatically expires or terminates when the Franchise Agreement expires or terminates. Byrider can also terminate the Software Agreement if the franchisee defaults on obligations and fails to correct the default within ten days of written notice. This dependency highlights that the franchisee's right to use the Licensed System is contingent upon maintaining a valid and active Franchise Agreement with Byrider.