Who bears the responsibility for consequences arising from improper operation, maintenance, or upgrades of the Technology System within a Red Wagon Club franchise?
Red_Wagon_Club Franchise · 2024 FDDAnswer from 2024 FDD Document
| Notwithstanding the fact that Franchisee agrees to buy, license, use, and maintain the Technology | |
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| System according to Franchisor standards and specifications, Franchisee will have sole and complete | |
| responsibility for acquiring, operating, maintaining and upgrading: (1) the Technology System; (2) the | |
| connectivity of Franchisee Technology System; and (3) third-party interfaces between the Technology | |
| System and Franchisor and any third party’s computer system. Franchisee will have sole and complete | |
| responsibility for any and all consequences if the Technology System is not properly operated, maintained, | |
| and upgraded, including as required under Section 9.F. |
| Franchisee may be required to license, and sign a software license agreement regarding, certain | |
|---|---|
| proprietary software as part of our requirements for the Technology System. Franchisor and its affiliates | |
| may charge Franchisee an initial and recurring fee for any proprietary software or technology that | |
| Franchisor or its affiliates license to Franchisee and for other maintenance, support, and technology | |
| development services that Franchisor or its affiliates provide (a “Technology Fee”). Franchisor reserves | |
| the right to increase the Technology Fee to reflect changes in the costs and availability of technology, | |
| provided that the Technology Fee may not be increased by more than $500 in any calendar month of the | |
| Term. Franchisor may also require that Franchisee pay Franchisor for software and other technology that | |
| Franchisee receives through Franchisor from third-party providers. Franchisee will have sole and complete | |
| responsibility for the manner in which Franchisee’s Technology System interfaces at Franchisor’s specified | |
| levels of connection speed with Franchisor’s and any third party’s computer system and any and all | |
| consequences if the Technology System is not properly operated, maintained, and upgraded. |
| Franchisee agrees to obtain and use business management services software, phone systems, and | |
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| such other computer hardware, software, and technology that Franchisor periodically specifies to be used | |
| in connection with Franchisee’s RWC Business (the “Technology System”). Franchisor may modify | |
| specifications for and components of the Technology System from time to time and Franchisee agrees to | |
| implement Franchisor’s modifications within ninety (90) days after Franchisee receives notice from | |
| Franchisor. Franchisor may periodically require Franchisee to purchase, lease, and/or license new or | |
| modified computer hardware and/or software and to obtain service and support for the Technology System. | |
| Franchisee agrees to incur the costs of obtaining the computer hardware and software comprising the | |
| Technology System (and any additions and modifications) and required service or support as Franchisor | |
| may require and modify from time to time. |
Source: Item 23 — RECEIPTS (FDD pages 47–142)
What This Means (2024 FDD)
According to the 2024 Red Wagon Club Franchise Disclosure Document, the franchisee bears sole and complete responsibility for any consequences resulting from the improper operation, maintenance, and upgrading of the Technology System. This includes acquiring, operating, maintaining, and upgrading the Technology System, its connectivity, and third-party interfaces.
This means that if the Technology System, which Red Wagon Club requires franchisees to use for business management, phone systems, and other specified technologies, is not properly managed, the franchisee is entirely liable for any resulting issues. These issues could range from operational inefficiencies and data breaches to non-compliance with required standards, all of which could lead to financial losses or damage to the Red Wagon Club brand's reputation.
Red Wagon Club also reserves the right to modify the specifications and components of the Technology System, requiring franchisees to implement these changes within 90 days of notice. Franchisees are responsible for incurring the costs associated with these modifications, including purchasing, leasing, or licensing new hardware and software, as well as obtaining necessary service and support. This ongoing investment and responsibility for proper upkeep highlights the importance of a franchisee's understanding of and commitment to maintaining the Technology System to Red Wagon Club's standards.