Can the Technology Fee for a Red Wagon Club franchise be increased?
Red_Wagon_Club Franchise · 2024 FDDAnswer from 2024 FDD Document
d 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 | |
|---|---|
| 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. |
Source: Item 23 — RECEIPTS (FDD pages 47–142)
What This Means (2024 FDD)
According to the 2024 Red Wagon Club Franchise Disclosure Document, Red Wagon Club reserves 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 how much the Technology Fee can be increased. Red Wagon Club states that the Technology Fee may not be increased by more than $500 in any calendar month of the Term. This provides some predictability for franchisees in budgeting for technology costs.
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 the consequences of any failures in operation, maintenance, or upgrades.