Is a computer services agreement included in the Management Recruiters Franchise Agreement?
Management_Recruiters Franchise · 2024 FDDAnswer from 2024 FDD Document
We have developed computer software to be used with the management and operation of our Franchise Business. We are the only approved supplier of this management and operations software for our franchised businesses. We will sublicense this software to you on the same terms and conditions as offered to all of our Franchisees similarly situated and you will be required to utilize the software in the operation of your Franchise Business in accordance with the specifications in the Brand Standards Materials. A form of the Computer Services Agreement is attached as Exhibit B to the Franchise Agreement. If you assign the Franchise Agreement, the Computer Services Agreement must be assigned to the new franchisee. In addition, you must pay for the actual cost of all software and published updates. At your expense, before you begin operations of the Franchise Business, you must purchase from us or a vendor approved by us the computer hardware and related equipment required for the operation and use of the software. During our last fiscal year ended December 31, 2023, we and our affiliates had zero revenues from franchisees purchasing from us software, computer equipment, or any other items for their businesses. All hardware and related equipment must meet the specifications provided in the Brand Standards Manual. Also, during the term of the Franchise Agreement, you must allow us access via telephone modem to your computer system to enable us to periodically upload and download data to facilitate our performance of automated payroll and related services.
Source: Item 22 — CONTRACTS (FDD pages 66–67)
What This Means (2024 FDD)
According to Management Recruiters' 2024 Franchise Disclosure Document, a Computer Services Agreement is part of the franchise agreement. Management Recruiters has developed proprietary computer software for managing and operating its franchise businesses, and franchisees are required to use this software.
The Computer Services Agreement is attached as Exhibit B to the Franchise Agreement. If a franchisee assigns their Franchise Agreement to a new franchisee, the Computer Services Agreement must also be assigned. Franchisees are responsible for the actual cost of the software and any updates. Additionally, franchisees must purchase the necessary computer hardware and related equipment from Management Recruiters or an approved vendor before beginning operations.
Management Recruiters also requires franchisees to allow them access to their computer systems via telephone modem. This access enables Management Recruiters to upload and download data periodically to facilitate automated payroll and related services. Franchisees are also responsible for all fees and expenses for technology used in the Franchise Business, including but not limited to, the costs of computer hardware and software, Internet access, license fees, help desk fees, licensing or user-based fees for a franchise portal or a benchmarking platform, web site design and hosting, and fees related to exposure on Franchisor's website.