What are the specific obligations of a Byrider franchisee regarding the confidentiality of information (as implied by obligations in Item 9) and how does this relate to the Proprietary Computer Software (Item 8)?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
chisee (or any person/company affiliated with the Franchisee) under any other agreement, including, but not limited to, any other franchise agreement, between the Company (or any of its affiliates) and the Franchisee (or any person/company affiliated with the Franchisee), and any default by the Franchisee (or any person/company affiliated with the Franchisee) under any obligation to the Company (or any of its affiliates) may be regarded as a default under this Agreement.
ARTICLE XVII
OBLIGATIONS UPON TERMINATION
17.1 Obligations. In the event of the termination or expiration of this Agreement, whether by reason of default, lapse of time or other cause, the Franchisee shall: (A) promptly pay all amounts owed to the Company; (B) promptly return to the Company the Manual and other confidential materials including, without limitation, all the BYRIDER Computer Software; (C) maintain confidentiality of all proprietary and Confidential Information furnished by the Company; (D) immediately cease using any of the Marks except as provided for herein; (E) immediately make all alterations to the building facilities and exterior signs at the Business Location to distinguish them from the appearance and identity of a Business; if the Franchisee shall fail or refuse to make or cause such changes to be made, the Company, without prejudice to its other rights and remedies, may enter upon the Business Location, forcibly if necessary, without being guilty of trespass or any other tort, and make such changes at the Franchisee's expense except as provided for herein; (F) within thirty (30) days after the termination or expiration of this Agreement, cancel all Byrider telephone listings, numbers and directory advertising, and, if required by the Company, direct the transfer of the same to the Company or on its order; (G) take such actions as may be necessary or desirable to assign to the Company or the Company's designee any Internet domain names, assumed name, rights or equivalent registration which contain the Marks, including, without limitation, any slogans used by the Company, within thirty (30) days after the termination or expiration of this Agreement; (H) comply with all covenants contained in Article XVIII herein; (I) pay all costs, including attorneys' fees, incurred by the Company in terminating this Agreement.
Further, if the Franchisee or an affiliate of Franchisee is the titleholder of the Business Location and if the termination of this Agreement is due to Franchisee's breach prior to the scheduled expiration of this Agreement according to 5.1 herein, the Company shall have the right, but not the obligation, to enter into a lease for the Business Location at a fair market value rental for a term of two (2) years.
- 17.2 Termination of Access to BYRIDER Computer Software. Upon termination or expiration of this Agreement, the Software Agreement shall also concurrently expire or terminate.
What This Means (2025 FDD)
According to the 2025 FDD, Byrider franchisees have several obligations regarding the confidentiality of information, particularly as it relates to the proprietary computer software. Franchisees must maintain the confidentiality of all proprietary and confidential information furnished by Byrider. This obligation extends beyond the termination or expiration of the Franchise Agreement. Franchisees must also implement safeguards to protect personal information, complying with privacy policies and data sharing laws. Access to confidential information requires executing confidential information covenants. These measures ensure the protection of sensitive data and maintain the integrity of Byrider's operations.
The Proprietary Computer Software is central to Byrider's operations, and franchisees must license it from Byrider Franchising Partners, entering into a Software Services and User Agreement. This software is essential for day-to-day business, including tracking inventory, managing customer information, processing financing, performing credit checks, and recording accounting transactions. Byrider retains unlimited access to the sales and vehicle repair information stored in the franchisee's files. Upon termination of the Franchise Agreement, the franchisee's access to the software is terminated, although Byrider will provide information needed for the franchisee to collect receivables and wind down the business.
These obligations are reinforced by the requirement that franchisees promptly return all confidential materials, including the Byrider Computer Software, upon termination or expiration of the agreement. Franchisees must also cease using any of Byrider's marks and make necessary alterations to distinguish their business location from a Byrider Business. The franchisor claims copyrights to the manuals and computer programs, emphasizing the importance of protecting this intellectual property. Franchisees are prohibited from using Byrider's confidential information in an unauthorized manner and must take steps to prevent its disclosure. This includes not duplicating the Operating Manual or removing it from the business location.
In practical terms, a prospective Byrider franchisee must understand that maintaining confidentiality is a critical aspect of the franchise agreement. This includes protecting customer data, proprietary business methods, and the proprietary software itself. Failure to comply with these obligations can result in legal and financial repercussions. The franchisee should carefully review the Software Services and User Agreement and ensure they have the necessary safeguards in place to protect confidential information. They should also be aware of their obligations upon termination of the agreement, including the return of all confidential materials and the cessation of use of the proprietary software.