From the DFA, "The judge in the United States District Court for the District of Minnesota granted the franchisees' motion for summary judgment. Effectively this ruling determined that the franchise agreements preclude the PULSE mandate and requires Domino's to provide franchisees with specifications for computer hardware and software so that the franchisees can acquire such computer hardware and software from any source. More particularly, the judge ruled that:
1. Section 8.2 precludes Domino's from mandating PULSE, or any other computer system, for that matter.
2. Section 8.2 requires Domino's to provide franchisees with the specifications for a computer system.
3. Specifications and/or standards are guides to constructing a finished product, and therefore they cannot be a finished product.
4. Section 8.2 requires Domino's to provide franchisees with specifications for computer hardware and software that would render it possible to obtain such items from multiple sources.
Given this ruling it is even more critical that you do not sign the current PULSE License Agreement, since the signing of such an agreement could impact your ability to exercise your rights under the franchise agreement, as clarified by the District Court ruling.
As stated in the past, we are neither pro-PULSE or anti-PULSE, we simply are pleased that the District Court has confirmed our belief that we have the right to acquire computer equipment meeting Domino's reasonable specifications from any source."
The entire ruling can be read here., and the DFA's press release is here.
This is area of commerce is going to be increasingly important. Domino's spent years developing the Pulse system, no doubt in part to track the consumer preference information.
What is emerges from a reading of the Court order that Domino's developed the new computer system without involving the Franchisee Association on how to share the additional revenue or information gathered.
Without such input and collaboration, it is no wonder why the DFA opposed the mandatory use of the Pulse system.
What does this mean for other franchise systems, who seek to share revenue or information by introducing new point of sale systems? Well unfortunately, like all hard won franchisee victories, this ruling would have been different had the franchisor thought to include computers and point of sale systems under items that had to be supplied by the franchisor in the contract. Would you like to bet about what is on the agenda for the next IFA's legal conference?
Let's hope that the DFA and the franchisor can now put behind them this contentious litigaiton and work together on setting joint goals, and devising fair procedures to split the value from obtaining those joint goals fairly. Ironically, there are great gains to be had for both
Leave a comment