What is the purpose of the Technology Fee for Ella Cafe franchisees?
Ella_Cafe Franchise · 2024 FDDAnswer from 2024 FDD Document
nchisee 90 days advance written notice of any change to the POS System requirements. Franchisee must acquire, install, and maintain such anti-virus and anti-spyware software as Franchisor requires and pay related costs, and Franchisee must adopt and implement such Internet user policies as Franchisor may prescribe for purposes of avoiding, blocking, and eliminating viruses and other conditions designed to interfere with operation of the POS System.
- 10.1.1 The computer system and/or POS for your Ella Coffee House will be dedicated for the operation of your Ella Coffee House business and used for no other purpose.
- 10.1.2 All sales must be processed through the approved POS systems and reported as gross sales and no other supplemental or secondary POS system may be used.
- 10.1.3 Consistent with the foregoing, among other things, Franchisor reserves the right periodically to undertake technology initiatives, the purpose of which would be enhance the technology associated with the franchise system including, without limitation, enhanced internet capability, use of proprietary digital applications and enhanced support services. Although Franchisor cannot estimate the future costs of the Computer System or required service or support, and although these costs might not be fully amortizable over the remaining term of this Agreement, Franchisee agrees to incur the costs of obtaining the computer hardware and software comprising the Computer System (or additions or modifications) and required service or support. Franchisor has no obligation to reimburse Franchisee for any Computer System costs. As otherwise permitted in this Agreement, Franchisor may access the Computer System and retrieve all pertinent information relating to the operation of the Coffee House in areas that we have the ability to control and/or remedy.
- 10.1.4 Notwithstanding the fact that Franchisee must purchase, use, and maintain the Computer System consistent with our standards and specifications, Franchisee will have sole and complete responsibility for: (1) the acquisition, operation, maintenance, updates and upgrading of the Computer System, including compliance with the standards that we periodically require; (2) the manner in which your Computer System interfaces with our computer system and those of other third parties; (3) the installation, maintenance and support of the Computer System, although Franchisor may from time to time require or recommend third parties to provide these functions; and (4) any and all consequences that may arise if the Computer System is not properly operated, maintained and upgraded, including but not limited to virus and spyware issues.
- 10.1.5 All of Franchisee's Computer Systems must be compliant with all applicable laws, regulations, and commonly accepted industry standards, including without limitation those laws, regulations, and commonly accepted industry standards relating to privacy, data security, and the processing and protection of confidential personal information, including without limitation the
Payment Card Industry Data Security Standards and all other standards applicable to electronic payments that may be published from time to time by payment card companies.
- 10.2 Software. Franchisee must: (a) use any proprietary software programs, system documentation manuals, and other proprietary materials that Franchisor requires in connection with the operation of the Coffee House ; (b) input and maintain in the POS System such data and information as Franchisor prescribes in the Manual, software programs, documentation, or otherwise; and (c) purchase new or upgraded software programs, system documentation manuals, and other proprietary materials at then-current prices whenever Franchisor adopts such new or upgraded programs, manuals, and materials system-wide. Franchisee must enter into all software license agreements, "terms of use" agreements, and software and hardware maintenance agreements, in the form and manner Franchisor prescribes, and pay all fees imposed thereunder.
- 10.3. Independent Access. Franchisor may independently poll Gross Sales and other information input and compiled by Franchisee's POS System from a remote location. There is no limitation on Franchisor's right to access this information. Franchisor may require that Franchisee connect to a Web-based application enabling independent access to the information on the POS System and other in- Coffee House computer and camera systems.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2024 FDD)
Based on the 2024 Ella Cafe Franchise Disclosure Document, Ella Cafe franchisees are required to use a computer system and/or POS system dedicated solely to their Ella Coffee House business. All sales must be processed through this approved POS system and reported as gross sales; no other systems are permitted. Ella Cafe retains the right to implement technology initiatives to enhance the franchise system's technology, including improved internet, proprietary digital applications, and enhanced support services. Franchisees are responsible for the costs of obtaining and maintaining the computer system hardware and software, even if these costs are not fully recoverable during the agreement term, and Ella Cafe is not obligated to reimburse these expenses. Ella Cafe may access the computer system to retrieve information about the Coffee House operation. Franchisees are solely responsible for the acquisition, operation, maintenance, updates, and upgrades of the computer system, ensuring it interfaces correctly with Ella Cafe's and third-party systems, and for any issues arising from improper operation or maintenance, such as viruses.
The franchisee must ensure that all computer systems comply with applicable laws, regulations, and industry standards related to privacy, data security, and the protection of confidential personal information. Ella Cafe may create and license social media accounts, e-mail marketing software accounts, and other electronic accounts that use the Marks for the Franchisee. The Franchisee may not create websites, social media accounts, e-mail marketing software accounts or other comparable accounts outside of those which Ella Cafe license to the Franchisee.
In practical terms, this means an Ella Cafe franchisee must invest in and continuously update their technology infrastructure to meet Ella Cafe's standards and legal requirements. They bear the financial burden and the responsibility for maintaining a compliant and functional system. While Ella Cafe can mandate technology upgrades, they do not offer financial assistance for these upgrades. This could pose a financial risk to franchisees if unexpected or frequent upgrades are required.
Prospective franchisees should clarify with Ella Cafe the typical costs and frequency of technology upgrades, the level of support provided for the computer systems, and the specific standards and regulations they must comply with to avoid potential financial burdens and operational disruptions.