Who pays for the actual cost of all software and published updates from Management Recruiters?
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 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 26–29)
What This Means (2024 FDD)
According to Management Recruiters's 2024 Franchise Disclosure Document, the franchisee is responsible for covering the actual costs of all software and published updates related to the franchised business's operations. Management Recruiters requires franchisees to use specific management and operations software, which is sublicensed to them under terms consistent with other similarly situated franchisees.
Before commencing operations, the franchisee must also purchase the necessary computer hardware and related equipment from Management Recruiters or an approved vendor. These hardware and equipment purchases are separate from the software costs. The hardware must meet the specifications outlined in the Brand Standards Manual.
Management Recruiters retains the right to access the franchisee's computer system via telephone modem to facilitate automated payroll and related services. During the fiscal year ending December 31, 2023, Management Recruiters and its affiliates reported zero revenues from franchisees for software, computer equipment, or other business-related items. This indicates that while franchisees bear the cost, Management Recruiters's revenue stream does not directly depend on these purchases.