Who owns the customer database used by a Mr. Sandless franchisee?
Mr_Sandless Franchise · 2025 FDDAnswer from 2025 FDD Document
s related to attendance at a franchisee convention, including travel, lodging and meals.
Computer System
You must purchase and maintain all computer hardware, software and other equipment ("Computer Equipment") specified by us to be used in connection with the operation of your Business. Currently you must have a Windows based personal computer with the Windows 7 operating system, at least 2 GB RAM and at least a 200 GB hard drive, as well as the monitor and printer of your choice. The Computer Equipment will provide you with e-mail capability, sales tracking, inventory tracking and customer information. We estimate that the cost to purchase the required Computer Equipment will be approximately $1,600. The Computer Equipment must be compatible with our central accounting system through a modem or other manual or electronic access. We have the right to require you to enter into a separate maintenance agreement for your Computer Equipment. You must update or replace any of the Computer Equipment, including hardware and software components, as we specify, and you must use the Computer Equipment in the manner we specify. There is no limit in the Franchise Agreement on either our right to require you to upgrade and/or update your Computer Equipment, or the cost of any upgrades and/or updates. Neither we nor any affiliate of ours will provide you with any maintenance, updates and/or upgrades for your Computer Equipment. The estimated cost of maintenance, updating, upgrading or support contracts for the computer system can range from $250 to $600 per year.
You must establish and maintain high speed Internet access (such as a T-1 line, cable modem or DSL) and an electronic mail address, and you must keep us informed of this information during the term of the Franchise Agreement. We will have the right to access your computer database at any time, at your expense, and you must provide us with any necessary user IDs and/or passwords for our access. We may access and download all information stored on your Computer Equipment, including sales and customer information, and there is no limit on our right to access and download this data. We may use the data downloaded from your Computer Equipment in any manner we choose, without compensation to you. Your customer database will, at all times, remain our property. We reserve the right to require you to install a "systems backup solution" which backs up critical data stored in your Computer Equipme
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 19–25)
What This Means (2025 FDD)
According to the 2025 Mr. Sandless Franchise Disclosure Document, the customer database created and maintained by a franchisee remains the property of Mr. Sandless. Mr. Sandless retains the right to access the franchisee's computer database at any time and at the franchisee's expense. To facilitate this access, the franchisee must provide Mr. Sandless with any necessary user IDs and passwords.
Mr. Sandless can access and download all information stored on the franchisee's computer equipment, including sales and customer information, without any limitations. Mr. Sandless can use this downloaded data in any manner they choose, without providing any compensation to the franchisee. This includes the right to require franchisees to install a "systems backup solution" for off-premises storage of critical data, to which Mr. Sandless must also be granted access upon request.
This arrangement has significant implications for a prospective Mr. Sandless franchisee. While the franchisee is responsible for building and maintaining the customer database, the franchisor retains ownership and control of this valuable asset. This means that upon termination or expiration of the franchise agreement, the franchisee would not retain the customer list they developed during the course of business. This is a fairly common practice in franchising, as the customer list is often considered part of the franchisor's intellectual property and brand equity.