Is a Byrider licensee liable for damages caused by a third party's activities resulting from the licensee's actions?

According to the 2025 Byrider Franchise Disclosure Document, a licensee is liable to Byrider and any affected franchisee for damages, whether direct or consequential, resulting from a third party's activities. This liability arises if the third party's activities stem from the licensee's use of the Licensed System in a manner not approved in writing by Byrider. This means that if a Byrider franchisee uses the Licensed System in an unapproved way, and that use leads to a third party taking actions that cause damage, the franchisee is responsible for those damages.

This clause places a significant responsibility on Byrider franchisees to adhere strictly to approved uses of the Licensed System. It also means that franchisees must be vigilant about how third parties interact with the system through their actions. The term 'Licensed System' refers to Byrider's computer software programs relating to 'buy-here-pay-here' automobile sales and collection management systems.

For a prospective Byrider franchisee, this highlights the importance of fully understanding and complying with the approved uses of the Licensed System. Failure to do so could result in liability for damages caused by third parties, potentially leading to significant financial losses. It would be prudent for a potential franchisee to seek clarity from Byrider regarding what constitutes approved and unapproved uses of the Licensed System to mitigate this risk.