Can Hck Hot Chicken sell, license, or sublicense Information Systems to franchisees?
Hck_Hot_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
- 7.3.1 Franchisee shall purchase, use, and maintain the Information Systems specified in the HCK Hot Chicken Brand Standards Manual in accordance with the Franchisor's standards and specifications as well as any under standards that Franchisor requires.
The Information Systems must always be connected to one or more high-speed communications media specified by Franchisor and be capable of accessing the Internet.
Franchisee must electronically link the Information Systems to Franchisor or its designee.
Franchisee shall allow Franchisor and/or its designee to access the Information Systems and stored files, and to add, remove, configure, and modify information systems via any means including electronic polling and uploads, with or without notice.
Franchisor may from time to time upon 30 days advance written notice require Franchisee, at Franchisee's sole cost and expense, to add, update, upgrade or replace the Information Systems, including hardware and/or software.
Although Franchisor cannot estimate the future costs of the Information Systems, required hardware, software, or service or support, and although these costs might not be fully amortizable over the time remaining in the Term, Franchisee agrees to acquire and incur the costs of obtaining and implementing the hardware, software and other components and devices comprising the Information Systems (including additions and modifications) and all support services, service and maintenance agreements and subscriptions prescribed by Franchisor to maintain, protect, and interface with Information Systems.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 54)
What This Means (2025 FDD)
According to the 2025 Hck Hot Chicken FDD, franchisees are required to purchase, use, and maintain the Information Systems specified in the Hck Hot Chicken Brand Standards Manual. These systems must adhere to Hck Hot Chicken's standards and specifications and must always be connected to high-speed communications media, with the capability to access the Internet. Franchisees are obligated to electronically link these Information Systems to Hck Hot Chicken or its designee, granting Hck Hot Chicken access to the systems and stored files for modifications.
Hck Hot Chicken retains the right to mandate, with 30 days' written notice, that franchisees add, update, upgrade, or replace their Information Systems, including both hardware and software, at the franchisee's expense. While Hck Hot Chicken cannot predict the future costs associated with these Information Systems, franchisees are responsible for acquiring and maintaining the necessary hardware, software, and support services to ensure the systems function correctly and interface with Hck Hot Chicken's network.
While the FDD outlines the franchisee's obligations to use and maintain specific information systems, it does not explicitly grant Hck Hot Chicken the right to sell, license, or sublicense these systems to its franchisees. The agreement focuses on the franchisee's responsibility to acquire and maintain the systems according to Hck Hot Chicken's standards, rather than Hck Hot Chicken acting as a direct vendor or licensor of the systems. A prospective franchisee should seek clarification from Hck Hot Chicken regarding the specific vendors or suppliers from whom these systems must be acquired and whether Hck Hot Chicken receives any direct or indirect financial benefit from these required purchases.