What responsibilities does a Red Wagon Club franchisee have regarding the acquisition of the Technology System?
Red_Wagon_Club Franchise · 2024 FDDAnswer from 2024 FDD Document
| 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. | |[Signature Page to Follow]
FRANCHISEE:
Sign here if you are taking the franchise as an INDIVIDUAL(S)
(Note: use these blocks if you are an individual or a partnership but the partnership is not a separate legal entity)
| Franchisee may be required to license, and sign a software license agreement regarding, certain | |
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| 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. |
Sign here if you are taking the franchise as a CORPORATION, LIMITED LIABILITY COMPANY OR PARTNERSHIP
| The Technology System may give Franchisor and its affiliates access to all information generated | |
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| by the Technology System, including price maintenance and information relating to customers for | |
| Franchisee’s RWC Business. At Franchisor’s request, Franchisee agrees to sign a release with any vendor | |
| of Franchisee’s Technology System providing Franchisor with unlimited access to Franchisee data. |
STATE EFFECTIVE DATES
The following states have franchise laws that require that the Franchise Disclosure Document be registered or filed with the state, or be exempt from registration: California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, Washington, and Wisconsin.
This document is effective and may be used in the following states, where the document is filed, registered or exempt from registration, as of the Effective Date stated below:
| 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; |
Source: Item 23 — RECEIPTS (FDD pages 47–142)
What This Means (2024 FDD)
According to the 2024 Red Wagon Club FDD, franchisees are responsible for obtaining and maintaining the Technology System used in their RWC Business. This includes business management services software, phone systems, and any other computer hardware, software, and technology that Red Wagon Club specifies. Red Wagon Club may modify the specifications for the Technology System, and franchisees must implement these modifications within 90 days of receiving notice.
Franchisees are responsible for the costs of acquiring the computer hardware and software, including any additions and modifications, as well as the required service or support. They may also be required to license proprietary software and sign a software license agreement. Red Wagon Club or its affiliates may charge franchisees an initial and recurring Technology Fee for proprietary software, technology, maintenance, support, and technology development services. The Technology Fee may increase, but not by more than $500 in any calendar month.
Even though franchisees must buy, license, use, and maintain the Technology System according to Red Wagon Club's standards, they have sole responsibility for acquiring, operating, maintaining, and upgrading the Technology System, its connectivity, and third-party interfaces. Franchisees are also responsible for any consequences resulting from the improper operation, maintenance, or upgrading of the Technology System. Red Wagon Club may access all information generated by the Technology System, including price maintenance and customer information. Franchisees may be required to sign a release providing Red Wagon Club with unlimited access to their data.
This arrangement means that while Red Wagon Club sets the standards and may require specific technology, the franchisee bears the financial burden and operational responsibility for the Technology System. This includes not only the initial costs but also ongoing maintenance, upgrades, and the risk of system failure. Prospective franchisees should carefully consider these costs and responsibilities when evaluating the Red Wagon Club franchise opportunity.