How does the required software licensing from Byrider Franchising Partners (Item 8) affect the franchisee's ability to manage their finances (as implied by obligations 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 Byrider's 2025 Franchise Disclosure Document, franchisees are required to license Byrider's Proprietary Computer Software, which impacts their ability to manage finances by mandating the use of specific systems for accounting and financial operations. Item 8 states that franchisees must license the Proprietary Computer Software from Byrider Franchising Partners and enter into a Software Services and User Agreement for ongoing service and support. This software is integral to the business, as described in Item 11, which includes programs to keep track of inventory and vehicle repairs, store customer information, assist in processing financing to customers, perform credit checks, and record accounting transactions.
This requirement means that Byrider franchisees do not have the option to choose alternative software for these critical business functions. The franchisor maintains sole rights to service, update, and maintain the software and can deny access for specific causes. While franchisees are responsible for acquiring, installing, and maintaining all technology at their location, they must use Byrider's proprietary software. The initial cost for hardware, software, and other technology components is estimated to range from $5,000 to $40,000, with annual maintenance costs ranging from $0 to $75,000, as stated in Item 11.
The use of Byrider's software also gives Byrider Franchising Partners unlimited independent access to sales and vehicle repair information stored in the franchisee's files. This access ensures compliance and oversight but also means franchisees must be comfortable with the franchisor having direct access to their financial and operational data. Furthermore, franchisees are responsible for paying the costs of the technology system to the appropriate vendor upon receiving invoices, as detailed in Item 23, reinforcing the financial obligation to maintain and utilize the mandated software. This integrated system is designed to ensure quality and consistency across all franchise locations, but it also centralizes control and access to financial data within the Byrider organization.