How does the required software licensing from Byrider Franchising Partners in Item 8 affect the franchisee's obligations listed in Item 9?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
A. Proprietary Computer Software and Starter Kit. You must license Byrider Franchising Partners' Proprietary Computer Software from Byrider Franchising Partners and enter into a Software Services and User Agreement (see Exhibit E attached to the Franchise Agreement) with Byrider Franchising Partners for ongoing service and support to the Proprietary Software and all other components of the technology system. Byrider Franchising Partners does not provide lease packages for its Proprietary Software but may provide you with a list of third parties that offer lease packages for the entire technology system as described in Item 11. Any financing you arrange for the purchase or lease of the technology system may not contain terms that encumber the Proprietary Software in any way. Under no circumstances will the ownership rights to the Proprietary Software change from Byrider Franchising Partners to you or to a third party.
What This Means (2025 FDD)
According to the 2025 Byrider Franchise Disclosure Document, Item 8 details the mandatory software licensing from Byrider Franchising Partners, which directly impacts the franchisee's obligations. Specifically, franchisees must license Byrider's Proprietary Computer Software and enter into a Software Services and User Agreement with Byrider Franchising Partners for ongoing service and support. This requirement ensures that franchisees use the designated technology system, which is crucial for the standardized operation of the Byrider business. The software license affects obligations in Item 9 because it mandates the use of specific systems for business operations, potentially influencing the initial and ongoing expenses detailed in Item 7.
Item 11 further clarifies that franchisees are responsible for acquiring, installing, and maintaining all technology at their location, including a stable internet connection. Byrider will assist with the installation of the Proprietary Software. The franchisee must also maintain a secure environment with regular patching of operating systems and software. Byrider retains the right to deny access to the software for specific causes like viruses or performance degradation, emphasizing the franchisee's responsibility to maintain system integrity. The cost to purchase or lease the technology system is estimated to range from $5,000 to $40,000, with annual maintenance costs ranging from $0 to $75,000.
Furthermore, the Byrider technology system includes a dealer management system with integrated Customer Relations Management (CRM) to assist with handling agency and direct consumer complaints. Franchisees are obligated to investigate complaints, forward them to Byrider's Customer Service, and respond to the agency or resolve the complaint directly, reporting the resolution to Customer Service. This CRM component, part of the licensed software, directly affects how franchisees must manage customer relations and comply with regulatory requirements. The 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.
In summary, the mandatory software licensing from Byrider Franchising Partners outlined in Item 8 creates specific obligations for the franchisee. These obligations include financial investments in technology, adherence to security and maintenance standards, and compliance with customer service protocols. These requirements are essential for maintaining the integrity and consistency of the Byrider brand and ensuring smooth operations across all franchise locations.