How does the required software licensing from Byrider Franchising Partners (Item 8) affect the franchisee's ability to comply with local regulations (as implied by obligations in Item 9)?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
You will be responsible for acquiring, installing and maintaining all technology at your location. A stable, business-class internet connection (preferably redundant connections) will be required to access technology resources hosted by Byrider Franchising Partners or third-party providers. Byrider Franchising Partners will provide VPN client access for a fee on a per-user basis (Franchise Agreement Article 13.2). You are required to maintain a secure environment with regular patching of Operating Systems and software. You may be required to periodically update technology (both hardware and software) at your location to match the current standards as they evolve over time. Byrider Franchising Partners will assist you in the installation of the Proprietary Software in connection with your technology system.
The Byrider Franchising Partners technology system is made up of four components: 1) Byrider Franchising Partners Proprietary Software, 2) off-the-shelf (third party) software, 3) local and centralized hardware, and 4) dealer management system with integrated mandatory Customer Relations Management provided at no additional cost to you. The Customer Relations Management assists with Agency and Direct Consumer Complaints. When you receive an Agency Complaint (such as Better Business Bureau, Attorney General, Consumer Financial Protection Bureau, Media, or Private Attorney), you must investigate the complaint, forward the complaint to Byrider Franchising Partners' Customer Service, and timely respond to the Agency; when you receive a Direct Consumer Complaint (i.e., Customer Service phone/email), you will investigate the complaint, resolve it directly, and timely report the results to Customer Service detailing the resolution or action taken. Byrider Franchising Partners' Compliance Department administers the Customer Service mailbox and phone line and tracks the complaints and responses. You are responsible for investigating, taking corrective action, and resolving these complaints. You must license and use the Byrider Franchising Partners technology system necessary to operate your day-to-day business (Franchise Agreement - Article 9.4) and maintain required records (Franchise Agreement - Articles 13.1 - 13.2). Byrider Franchising Partners will have independent access to the data collected in your files.
The cost of technology implemented at the franchise location is the sole responsibility of the franchisee to install, maintain and upgrade. There is a per-site fee to cover VPN clients for accessing Byrider Franchising Partners proprietary systems as well as a per-user fee to license hosted services such as email.
What This Means (2025 FDD)
According to Byrider's 2025 Franchise Disclosure Document, franchisees must license Byrider Franchising Partners' Proprietary Computer Software and enter into a Software Services and User Agreement. This software is integral to the business, assisting with inventory, vehicle repairs, customer information, financing, credit checks, and accounting. Byrider retains the right to service, update, and maintain the software, and can deny access for security reasons. Franchisees are responsible for acquiring, installing, and maintaining all technology at their location, including a stable internet connection. They must also maintain a secure environment with regular patching of operating systems and software and may need to update technology to meet evolving standards.
Byrider also requires franchisees to use their technology system, which includes Customer Relations Management, to handle agency and direct consumer complaints. Franchisees must investigate complaints, forward them to Byrider's Customer Service, and respond to the agency promptly. They are responsible for taking corrective action and resolving these complaints. Byrider has independent access to the data collected in the franchisee's files. The cost of implementing, maintaining, and upgrading technology at the franchise location is the franchisee's responsibility. There are also per-site and per-user fees for VPN clients and hosted services like email.
While the FDD excerpts detail the software and technology requirements, they do not explicitly state how the required software licensing from Byrider Franchising Partners directly affects the franchisee's ability to comply with local regulations. However, the software's functions, such as processing financing and storing customer information, likely play a role in compliance. A prospective franchisee should ask Byrider how the proprietary software helps ensure compliance with specific local regulations related to consumer finance, data privacy, and other relevant areas. They should also inquire about any updates or modifications to the software to address changes in local laws.