What rights does the Ifly Franchisor have regarding the Control System Software?
Ifly Franchise · 2024 FDDAnswer from 2024 FDD Document
ize of the Territory (including reduction to zero) or reconfigure the Territory; or
- 12.6.3. suspend, not renew, or terminate the Control System Software License and disable the Control System Software thereby rendering the Equipment inoperable; or
- 12.6.4. disable or terminate Franchisee's access to the Information Collection and Retrieval System.
Franchisor's exercise of any of its remedies under this Section 12.6. shall not constitute a waiver by Franchisor to exercise its option to terminate this Agreement at any time with respect to a subsequent event of breach of a similar or different nature. If Franchisor elects to exercise one or more of the additional remedies set forth above, Franchisee shall continue to operate in accordance with its rights and obligations hereunder, as so modified, and no such modification shall excuse Franchisee's performance of its obligations under this Agreement.
12.7. Post-Term Rights and Obligations. Upon the expiration or termination of this Agreement all rights and licenses granted herein shall terminate and Franchisee, its Affiliates and Owners, employees and agents, shall forthwith:
- 12.7.1.
Source: Item 23 — Receipts (FDD pages 57–174)
What This Means (2024 FDD)
According to Ifly's 2024 Franchise Disclosure Document, Ifly has significant control over the Control System Software used to operate the Equipment. The Control System Software is defined as the operating software for the Equipment, and franchisees are granted a month-to-month license to use it.
Specifically, Ifly can suspend, not renew, or terminate the Control System Software License, which would effectively disable the Equipment. This gives Ifly a powerful tool to enforce compliance with the franchise agreement. The Control System Software License is automatically renewed each month during the Term of the Franchise Agreement as long as Franchisee remains in compliance with its royalty payment and other obligations.
This control extends to post-term obligations, where upon expiration or termination of the agreement, the franchisee must discontinue the use of all Trademarks and Confidential Information, which includes the Control System Software. This ensures that franchisees cannot continue to operate a competing business using Ifly's proprietary software after the agreement ends.
In practical terms, this means that an Ifly franchisee's ability to operate their wind tunnel is heavily dependent on maintaining a good relationship with Ifly and adhering to the terms of the franchise agreement. Failure to comply with royalty payments or other obligations could result in the franchisee losing access to the software necessary to run the business.