Under what conditions can City Wide charge the Franchisee a fee for software upgrades or modifications?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
During the term of this Agreement, City Wide will provide IT Services to the Franchised Business (including employees) including laptop hardware, answering Franchisee's reasonable questions about access to and operation of the Technology System by e-mail, or in written and/or electronic documents.
- h.
IT Services will include minor Software upgrades and modifications; provided, however, City Wide reserves the right to determine when major upgrades or modifications are necessary and shall have the right to charge Franchisee a reasonable fee for the same.
If City Wide determines that a major upgrade or modification is necessary, Franchisee shall implement the Software change in a manner and time designated by City Wide.
- 11.12 Cost of Upgrades.
Franchisee will be responsible for the costs of all enterprise upgrades and replacements of all equipment required to operate the Software.
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, City Wide provides IT services to the franchisee, including minor software upgrades and modifications, as part of their services. However, City Wide retains the right to determine when major upgrades or modifications to the software are necessary. If City Wide determines that a major upgrade or modification is needed, they can charge the franchisee a reasonable fee for it. The franchisee is then obligated to implement the software change in the manner and timeframe specified by City Wide.
This means that while basic IT support and minor software adjustments are covered under the IT Services Fee, significant changes to the software can incur additional costs for the franchisee. The FDD does not define what constitutes a 'reasonable fee' or 'major upgrade', so it is important for prospective franchisees to clarify these terms with City Wide during their due diligence. Understanding the potential costs associated with major software changes is crucial for budgeting and financial planning.
Furthermore, the franchisee is responsible for the costs of all enterprise upgrades and replacements of all equipment required to operate the software. This indicates that franchisees should anticipate expenses related to both the software itself and the hardware necessary to run it. Franchisees should inquire about the typical frequency and estimated costs of such upgrades and replacements to fully understand the financial implications of maintaining the technology infrastructure required by the City Wide franchise.