What are the Carls franchisee's obligations regarding the use of approved computer systems, as potentially outlined in Item 11, and how does this relate to the restrictions on sources of products and services in Item 8?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
You must obtain and install data processing equipment, computer hardware, required dedicated telephone and power lines, high speed Internet connections, modems, printers and other computer related accessory or peripheral equipment as we may specify in the OPM or otherwise in writing ("Computer/POS System"), as further explained in Item 11. Current approved vendors for technology components of the Computer/POS System are PAR Tech, Inc., CrunchTime, QSR Automations, Xenial Xpient (4.0 or higher) and Meraki. Currently, you must use either the PAR Brink (and CrunchTime) POS software or the Xenial Xpient (4.0 or higher) POS software in operating your Franchised Restaurant. You must utilize any proprietary software program, system documentation manuals and other proprietary materials provided by us in connection with the operation of the Franchised Restaurant. When we provide proprietary software, we may require that you execute one or more standard form software license or similar agreements and input and maintain in your computer the software programs, data and information as we prescribe. You must purchase from us, at prices and upon terms that we determine, the proprietary software programs, manuals and/or computer-related materials whenever we decide to use new or upgraded programs, manuals and/or materials throughout the Carl's Jr. System. Except as described in Items 6 and 11, there are currently no payments to be made to us in connection with these items. You must comply with the Payment Card Industry Data Security Standard ("PCI-DSS") at all times and engage any vendor that we may designate to ensure the security of your data and compliance with PCI-DSS. You must maintain continuous PCI compliance and must attest this to us annually by providing us with a completed and signed PCI Attestation of Compliance.
You must also participate in any online ordering/delivery and loyalty programs that we may establish from time to time with approved vendors and you must comply with the rules and participation criteria applicable to these programs. We have currently designated OLO as the sole software platform provider for our online ordering program, Punchh as the sole software platform for our loyalty program, and have partnered with designated service providers for our delivery program. Under our online ordering/delivery programs, we require you to accept and process specific customer delivery orders and we require you to use approved third-party delivery service providers, currently Uber Eats, Door Dash, and GrubHub. We must pre-approve all delivery service providers not already designated as approved under our delivery program. In addition, we must pre-approve all sales recording processes that originate from the delivery service providers. We have the right to modify the participation criteria or discontinue these initiates at any time upon written notice to you. See also Item 11.
What This Means (2024 FDD)
According to Carls's 2024 Franchise Disclosure Document, franchisees are obligated to obtain and install specific data processing equipment, computer hardware, and related accessories as specified by Carls in their Operation Procedures Manual (OPM) or in writing. This includes dedicated telephone and power lines, high-speed internet connections, modems, and printers. Currently approved vendors for the technology components of the Computer/POS System are PAR Tech, Inc., CrunchTime, QSR Automations, Xenial Xpient (4.0 or higher) and Meraki. Franchisees must use either the PAR Brink (and CrunchTime) POS software or the Xenial Xpient (4.0 or higher) POS software. Franchisees must also use any proprietary software, system documentation manuals, and other proprietary materials provided by Carls.
Carls may require franchisees to execute standard software license agreements and maintain prescribed software programs, data, and information in their computers. Franchisees must purchase proprietary software programs, manuals, and computer-related materials from Carls at prices and terms determined by Carls whenever new or upgraded programs are implemented throughout the Carl's Jr. system. Franchisees are responsible for complying with the Payment Card Industry Data Security Standard (PCI-DSS) and must engage vendors designated by Carls to ensure data security and PCI-DSS compliance. Continuous PCI compliance must be maintained, with annual attestation provided to Carls via a completed and signed PCI Attestation of Compliance.
These requirements are directly related to the restrictions on sources of products and services outlined in Item 8, as Carls controls the approved vendors and software that franchisees must use. This ensures uniformity and quality control across all Carl's Jr. restaurants. Franchisees must also participate in any online ordering/delivery and loyalty programs that Carls establishes with approved vendors, complying with all applicable rules and participation criteria. Carls has designated specific software platforms and delivery service providers for these programs, requiring franchisees to use these approved third parties and pre-approve any others. This allows Carls to maintain consistency and standards in technology and service offerings throughout the franchise system.