Can Devon Creek require a franchisee to install and maintain systems for payment processing and bookkeeping?
Devon_Creek Franchise · 2024 FDDAnswer from 2024 FDD Document
incurable default and thereby subject to termination as provided herein.
12.3 Computer Systems.
- 12.3.1. Franchisee, at Franchisee's sole expense, shall install and maintain the Computer System and other computer hardware and software Franchisor requires for the operation of the Franchised Business and shall follow the procedures related thereto that Franchisor specifies in the Manual or otherwise in writing.
- 12.3.2. Franchisor may require Franchisee, at Franchisee's sole expense, to install and maintain systems and web-based payment processing and bookkeeping accounts that permit Franchisor to independently and electronically access and retrieve any information stored in Franchisee's Computer System and accounts, including, without limitation, information concerning Gross Revenue. Upon Franchisor's request, Franchisee shall execute such documents as Franchisor deems necessary to permit Franchisor to independently and electronically access and retrieve all information stored on Franchisee's Computer System, other systems and webbased payment processing and bookkeeping accounts.
- 12.3.3 Any and all customer data collected or provided by Franchisee, retrieved from Franchisee's Computer System, or otherwise collected from Franchisee by Franchisor or provided to Franchisor, is and will be owned exclusively by Franchisor and will be considered to be Franchisor's proprietary and Confidential Information. Franchisor has the right to use such data in any manner without compensation to Franchisee. Franchisor licenses to Franchisee the use of such data solely for the purpose of operating the Franchised Business; provided that, this license shall automatically and irrevocably terminate, without any additional action or notice required by Franchisor, upon the expiration or earlier termination of this Agreement.
- 12.3.4. Franchisor may require Franchisee, at Franchisee's sole expense, to enter into software license agreements in the form that Franchisor requires for software Franchisor develops or acquires for use in the System.
- 12.3.5. Franchisee shall have and maintain adequate hardware and software in order to access the Internet at the speed required by Franchisor from time to time. Franchisee shall use the electronic mail account provided by Franchisor. Franchisee shall promptly read and respond to all electronic mail related to the Franchised Business no less often than on a daily basis and shall accept and acknowledge receipt of all electronic mail sent by Franchisor. Franchisee shall not establish any website or other listing on the Internet except as provided and specifically permitted herein.
- 12.3.6. Franchisor has established a website that provides information about the System and the services and products offered by the Devon Creek System (the "Website").
Source: Item 22 — CONTRACTS (FDD page 45)
What This Means (2024 FDD)
According to Devon Creek's 2024 Franchise Disclosure Document, Devon Creek can require franchisees to install and maintain specific computer systems, including those for payment processing and bookkeeping. The franchisee bears the expense of these systems. Devon Creek can mandate systems that allow them to independently and electronically access and retrieve information from the franchisee's computer system and accounts, including gross revenue data. Franchisees must also execute documents that enable Devon Creek to access this information.
This requirement gives Devon Creek significant oversight into the franchisee's operations and financial performance. It ensures that Devon Creek can monitor sales, manage brand standards, and potentially collect royalties or other fees accurately. The franchisee needs to budget for the initial costs and ongoing maintenance of these required systems.
Furthermore, all customer data collected by the franchisee or retrieved by Devon Creek is owned exclusively by Devon Creek. Devon Creek has the right to use this data without compensating the franchisee, licensing its use back to the franchisee solely for operating the franchised business. This license terminates upon expiration or termination of the franchise agreement.
In addition to installing and maintaining the computer system, franchisees must also make any and all upgrades to equipment, including but not limited to, the Computer System, telecommunications hardware and software, payment processing systems, and any technology used in conjunction therewith, as Devon Creek requires in its sole and absolute discretion. This ensures that franchisees stay current with technology and system standards.