Does Red Wagon Club have the right to increase the Technology Fee?
Red_Wagon_Club Franchise · 2024 FDDAnswer from 2024 FDD Document
| 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. |
Source: Item 23 — RECEIPTS (FDD pages 47–142)
What This Means (2024 FDD)
According to Red Wagon Club's 2024 Franchise Disclosure Document, Red Wagon Club retains the right to increase the Technology Fee charged to franchisees. This fee covers proprietary software, technology licenses, maintenance, support, and technology development services provided by Red Wagon Club or its affiliates.
However, there are limitations to this right. Red Wagon Club can only increase the Technology Fee to reflect changes in the costs and availability of technology. Furthermore, the increase is capped at a maximum of $500 in any calendar month during the term of the franchise agreement.
In addition to the Technology Fee, Red Wagon Club may also require franchisees to pay for software and other technology obtained through third-party providers. Franchisees are solely responsible for ensuring their Technology System interfaces properly with Red Wagon Club's and any third party's computer systems, and for any consequences resulting from improper operation, maintenance, or upgrades.