If Extreme Art Studio sublicenses software to the franchisee, can they charge the franchisee a fee?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
We reserve the right to: (i) change or add approved suppliers or vendors of these services at any time, in our sole discretion; (ii) enter into a master license agreement with any software or technology supplier and sublicense the software or technology to you, in which case we may charge you for all amounts that we must pay to the licensor based on your use of the software or technology; (iii) create proprietary software or technology that must be used by Extreme Art Studio franchisees, in which case we may require that you enter into a license agreement with us and pay us reasonable initial and ongoing licensing, support and maintenance fees; and (iv) increase or decrease the technology fee and other technology and licensing and expenses that you are required to pay under this Franchise Agreement at any time, upon 30 days' written notice to you.
Source: Item 22 — CONTRACTS (FDD page 49)
What This Means (2024 FDD)
According to the 2024 Extreme Art Studio Franchise Disclosure Document, Extreme Art Studio has the right to enter into a master license agreement with any software or technology supplier and sublicense the software or technology to the franchisee. In such cases, Extreme Art Studio may charge the franchisee for all amounts that Extreme Art Studio must pay to the licensor based on the franchisee's use of the software or technology. This means that if Extreme Art Studio incurs costs to license software that franchisees use, those costs can be passed on to the franchisee.
Extreme Art Studio can also create proprietary software or technology that franchisees must use. If they do so, they may require franchisees to enter into a license agreement and pay reasonable initial and ongoing licensing, support, and maintenance fees. This gives Extreme Art Studio the flexibility to develop its own software solutions and charge franchisees for their use and upkeep.
Furthermore, Extreme Art Studio reserves the right to increase or decrease the technology fee and other technology and licensing expenses that franchisees are required to pay under the Franchise Agreement at any time, provided they give 30 days' written notice. This clause allows Extreme Art Studio to adjust fees to reflect changes in technology costs or to invest in new systems, but it also introduces a degree of uncertainty for franchisees, as their technology expenses could fluctuate over time.