What is the obligation of a Cd One Price Cleaners franchisee regarding obtaining services from COW?
Cd_One_Price_Cleaners Franchise · 2025 FDDAnswer from 2025 FDD Document
- B. Franchisor offers a program to provide pickup and delivery services that Franchisor specifies (as Franchisor may periodically modify them, collectively, the "PUD Services") from the Store, and Franchisee agrees to provide PUD Services from the Store, and obtain services from COW, all in accordance with the terms and conditions of this Addendum and the Franchise Agreement.
8. Order Processing.
- (a) In accordance with Section 6.4 of the Franchise Agreement, Franchisor hereby designates COW as the current exclusive provider of, and COW hereby agrees to use commercially reasonable efforts to provide to Franchisee, order processing services with respect to orders for PUD Services from Franchisee's Standard Customers and approved Non-Standard Customers ("Orders") according to this Section 7 (as COW may update and modify them from time to time, collectively, the "Order Processing Services"). COW shall process the Orders and provide the Order Processing Services through the "Order Processing System." The Order Processing System may vary from time to time, but currently includes a technology solution through which customers can place Orders and pay for the PUD Services through a website accessible by a computer or an app that customers download on their mobile phones and a mechanism for CD Store operators and their drivers to plan routes and track Orders. COW will use commercially reasonable efforts to provide Order Processing Services consistent with prevailing standards in the industry, but does not provide any warranty or guaranty that the Order Processing Services will be error-free or uninterrupted. Franchisee hereby waives any claim against Franchisor and COW, whether for lost revenue or otherwise, due to the failure to provide Order Processing Services or any errors associated with the Order Processing Services. Franchisee agrees to sign or otherwise consent to the terms of use or similar agreement that COW periodically specifies concerning its and its authorized personnel's access to and use of the Order Processing System.
- (c) Under the current Order Processing System, Standard Customers and approved Non-Standard Customers will pay the credit card/payment processor whom COW periodically designates (the "Payment Processor") for all Orders, and the Payment Processor will pay (e) to COW, a technology fee (a "Technology Fee") in an amount equal to five percent (5%) of the Gross PUD Revenue as compensation for the Order Processing Services.
Source: Item 22 — Contracts (FDD page 72)
What This Means (2025 FDD)
According to the 2025 Cd One Price Cleaners FDD, a franchisee is obligated to obtain order processing services from COW (the current exclusive provider) for pickup and delivery (PUD) services. This obligation is detailed within an addendum to the Franchise Agreement, where the franchisee agrees to provide PUD Services from their store and to obtain services from COW in accordance with the addendum's terms and conditions. COW is responsible for providing order processing services for both Standard Customers and approved Non-Standard Customers through an Order Processing System.
The Order Processing System, as described in the FDD, includes a technology solution that allows customers to place orders and pay for PUD services via a website or mobile app. It also provides a mechanism for CD Store operators and their drivers to plan routes and track orders. While COW commits to using commercially reasonable efforts to provide Order Processing Services consistent with industry standards, it does not guarantee error-free or uninterrupted service. The franchisee waives any claims against both the franchisor and COW for lost revenue or errors associated with these services.
Furthermore, the franchisee is required to consent to the terms of use specified by COW regarding access to and use of the Order Processing System by the franchisee and their authorized personnel. The franchisee acknowledges that COW owns all intellectual property rights related to the Order Processing System. The FDD also states that franchisees must sign agreements with a Payment Processor designated by COW to facilitate payments under the Order Processing System. In return for these services, the franchisee pays COW a technology fee equal to 5% of gross PUD revenue.