FRANCHISE ELECTRONIC FILING
AND SOFTWARE SYSTEMS AGREEMENT
This Franchise Electronic Filing and Software Systems Agreement ("Agreement") is entered into between JTH Tax, Inc. d/b/a Liberty Tax Service and its affiliates ("Liberty"), and you ("Franchisee") (collectively "Parties"). BY CLICKING YOUR ACCEPTANCE OF THIS AFREEMENT OR BY INSTALLING, ACCESSING, OR USING ANY SOFTWARE THIS IS PART OF THE LIBERTY PROGRAM AND SYSTEM (as that term is defined below), YOU ACKNOWLEDGE THAT YOU HAVE READ ALL OF THE TERMS AND CONDITIONS OF THIS AGREEMENT AND AGREE TO BE BOUND BY THEM.IF YOU DO NOT AGREE TO ALL OF THE TERMS AND CONDITIONS IN THIS AGREEMENT, YOU MAY NOT USE THE SOFTWARE.
Franchisee is a party to a franchise agreement or franchise agreements with Liberty (all of which may be referred to collectively as the "Franchise Agreement" or may be referred to separately as "each separate Franchise Agreement," as the context requires). All capitalized terms used in this Agreement, not otherwise speciically defined, will have the meanings as defined in the Franchise Agreement.
Liberty has developed software systems to prepare income tax returns and deliver related products and services and a computerized suystem that allows franchisees to provide clients with various products and services, including the ability to use the IRS's e-file system ("Electronic Filinf Services") (collectively "Program and System"). Franchisee desires to use the Program and System for the operation of the Franchised Business.
In exchange for the respective promises contained this Agreement, the Parties agree as follows:
1. Grant of License. subject to the terms and conditions set forth below and in the Franchise Agreement, Liberty grants Franchisee a non-exclusive, non-sublicensable, and non-transferable license to use the Program and system solely in connection with the operation of the Franchised Business and Electronic Filing Services during the term of this Agreement.
2. Use of the Liberty Program and System. Franchisee will use the Program and System exclusively for the purpose of Electronic Filing Services and only during the times that Liberty makes the Program and System available. Liberty will announce through written or electronic communications directed to Franchisee any dates established by Liberty as the first date or last date that Electronic Filing Services may be provided by Franchisee to clients through use of the Program and System. Any announcement will not be subject to the “Notices” provision of this Agreement. Liberty will provide Franchisee with any modifications or enhancements to the Program and System in Liberty’s sole discretion. Liberty may update the Program and System periodically throughout the year, and you are required to follow all relevant instructions to update your computer system accordingly. Franchisee is required to use the Program and System exclusively for the purpose of Electronic Filing Services.
Liberty will provide a variety of services to Franchisee that are allowed by applicable laws and consistent with the Franchise Agreement and related documents. Some of these services will involve a disclosure by Franchisee of Client Data, including tax return information to Liberty. In the ordinary course of business, the Parties may disclose Client Data and any other non-public, personal information to each other as permitted by law including, but not limited to, when: (a) the receiving party is acting as a service provider to the disclosing party, or (b) necessary to effect, administer, or enforce a transaction that a client requests or authorizes, or (c) servicing or processing financial products or services that a client requests or authorizes to maintain or service the client’s account. The party receiving Client Data and any other non-public, personal information must take reasonable and appropriate steps to maintain safeguards for the protection of all Client Data and any other non-public, personal information provided by the disclosing party; and the receiving party agrees that it is prohibited from disclosing or using the Client Data and any other non- public, personal information other than to carry out Services (as defined in Section 6 of this Agreement). This may include other uses or disclosures as permitted by law in the ordinary course of business so that the receiving party may perform Services.
The Parties are tax return preparers subject to IRC Section 7216. IRC Section 7216 limits tax return preparers’ ability to use and disclose tax return information without consent for purposes other than the preparation of a tax return; however, certain exceptions may apply (including, but not limited to, a party’s provision of “auxiliary services” for another party in connection with tax preparation). The Parties are subject to restrictions under IRC Section 7216 and acknowledge that a violation is a misdemeanor criminal offense subject to: (a) a $1,000 fine per violation, (b) a prison sentence of up to one year, and (c) certain civil penalties available under IRC Section 6713.
3. Term. Unless terminated earlier, this Agreement is in effect for a “Term” commencing upon acceptance by Franchisee and ending on the earlier of: (a) at such time that Franchisee exits as a Liberty franchisee; or (b) the date a subsequent Franchise Electronic Filing and Software Systems Agreement is accepted by Franchisee.
4. Limitations on Authority Granted. Franchisee must use the Program and System only as provided in this Agreement or as otherwise instructed by Liberty and only during the Term granted under this Agreement. Franchisee must use the Program and System when Liberty’s Electronic Filing Services are permitted to be offered by Franchisee, only at Approved Locations and pursuant to the terms of the Franchise Agreement. Franchisee further agrees and acknowledges that all Client Data recorded and transmitted by Franchisee using the Program and System will be transmitted to Liberty.
5. Conditions Precedent. This Agreement and the respective rights and obligations of the Parties regarding the Program and System during the Term are expressly conditioned upon (a) Liberty’s acceptance to participate in the IRS’s Electronic Filing Services for the Tax Season (the period from the first weekday after January 1 through the last date individual federal income tax returns for the preceding year may be filed without an extension of time or incurring any penalty for late filing); (b) Franchisee’s being accepted by the IRS to participate in Electronic Filing Services for the Tax Season; and (c) Franchisee’s satisfactory completion of training in the use and operation of the Program and System as determined by Liberty in its sole discretion and continuation as a Franchisee pursuant to valid Franchise Agreement with Liberty.
6. Integration with Franchise Agreement. Any services performed using the Program and System, Electronic Filing Services or Authorized Services (collectively, “Services”), and all provisions in each separate Franchise Agreement under which the Services are conducted, will pertain to the Program and System or Electronic Filing Services. Any provision in this Agreement pertaining to the Program and System or Electronic Filing Services that differs from any related provision of the Franchise Agreement pertaining to Services, will constitute an amendment to the Franchise Agreement solely with respect to the Program and System or Electronic Filing Services. Franchisee’s material and substantial breach of the terms of this Agreement will entitle Liberty, in addition to all other remedies for the breach provided in this Agreement, to terminate each separate Franchise Agreement to which the breach relates according to its terms.
7. Remote Computer Access for Audits and Service.
7.1 Audits and Assistance. Liberty may audit your Franchised Business remotely by accessing your computer system electronically. You acknowledge and authorize Liberty to have unlimited remote computer access rights to your system to perform audits and service, and you must cooperate with Liberty in implementing any resulting recommendations or computer-related maintenance actions.
7.2 Service. If service involves transferring information or installing software, you represent that you have the legal right to copy the information, use the software, agree to the terms of the software license, and authorize Liberty to transfer information and accept the terms on your behalf in performing the service.
7.3 Remote Computer Access. You give Liberty unlimited remote access to your computer data, hardware, software, and any applicable network or related device to provide services or perform audits. You will allow Liberty to temporarily control your computer and access your computer functions, with or without prior notice to you. If requested by Liberty, you will leave your computer and internet connection operating while Liberty provides the services described above. You understand that while providing services, Liberty may access personal information on your computer or information related to your computer. Liberty will use commercially reasonable efforts to maintain the confidentiality of any information viewed by Liberty on your computer, except as required by law. Liberty may download third-party software applications that constantly or intermittently run on your computer that may execute code to analyze system performance and scan for problems. The software provided by Liberty is provided solely as a convenience to you and does not constitute or imply an endorsement, guarantee, warranty, sponsorship, or recommendation of affiliation with the third-party or its products or services. You also acknowledge and agree that upon termination of any Franchise Agreement Liberty has the right to remotely wipe the computers used in the operation of the franchised business associated with that Franchise Agreement.
7.4 No Warranty. In providing the service described in this Section 7, Liberty specifically disclaims all warranties, remedies, and conditions (whether oral or written, express or implied) including warranties of merchantability and fitness for the particular purpose, with respect to the service performed for you by Liberty. Liberty does not guarantee that it will locate, diagnose, or fix any problems, including eliminating viruses, worms, spyware, or similar programs.
7.5 Limitation of Liability. If damages occur while your computer or systems are being serviced, Liberty has no liability for the cost to repair the affected computer or systems. Liberty has no liability for indirect, special, exemplary, or consequential damages, including without limitation, loss of use, lost profits or revenue, or any other damages not otherwise expressly permitted under this Agreement. Liberty expressly has no liability for loss of or damage to data or software applications while performing service.
7.6 Data Protection. You are required to conduct all Franchised Business as described in the Franchise Agreement and Operations Manual and to maintain and store all Client Data consistent with all applicable laws and regulations.
8. Liberty Names and Logos. Any names or logos used by Liberty in connection with the Program and System are Licensed Marks. Franchisee must use the names and logos selected by Liberty to describe or market the Program and System. Franchisee must not use any other names or logos in connection with the Program and System without the prior written consent of Liberty. Franchisee must not publish or release any communication or advertisement relating to the Program and System without Liberty’s prior written approval.
10. Training and Support. During the Term of this Agreement, Liberty will provide Franchisee with training in the use and operation of the Program and System, and the technical and software support that Liberty determines is necessary. The training will be conducted only on the dates and at the times and locations to the maximum number of Franchisee’s employees (including Franchisee, if an individual) that Liberty determines. All expenses associated with attending the training will be borne by Franchisee. Subject to the limitations set forth in Sections 11 and 12 below, Liberty will provide Franchisee with technical and software support during hours to be specified by Liberty and via the means specified by Liberty to designated representatives of Franchisee and may remotely access Franchisee’s computer for purposes of providing technical and software support. Liberty will have no obligation to provide to Franchisee any other type of support.
11. Software for State Returns. At Liberty’s sole discretion, the Program and System may include software for the preparation of state income tax returns (“State Software”). Liberty makes no representation or guarantee to Franchisee that the State Software will be included in the Program and System during the Term of this Agreement. Liberty may, but will have no obligation to, provide State Software training or program support.
12. Restrictions on Use of Proprietary Material.
12.1 Restrictions. Unless expressly authorized in this Agreement, Franchisee: (A) will not and will not permit any other person or firm to, without the prior written consent of Liberty, copy or otherwise reproduce, modify, sell, or exchange licensed materials or transmit (by telephone lines or otherwise), give away, or disclose licensed materials to any other person or firm; (B) will not authorize or permit any other person, other than Franchisee’s employees in the course and scope of their employment, to use licensed materials; and (C) will not, without the prior written approval of Liberty, contract with any person engaged n the conduct of a tax return preparation service to provide a transmission service and will not use the licensed materials furnished by Liberty for the benefit of or to assist the person in the conduct of the tax return preparation service.
12.2 Improvements. “Improvements” means any improvements, advertising, or promotional ideas, inventions, ideas, works of authorship, copyrights, trademarks, logos, commercial symbols, or other additions to or intellectual property rights in or related to the Program and System, website, Franchised Business, or Licensed Marks. During the Term of this Agreement, Franchisee must promptly and fully disclose any Improvements to Liberty, without disclosing the Improvements to others, and must obtain Liberty’s written approval prior to using the Improvements. Any Improvement is considered Confidential Information of Liberty and is subject to the limitations set forth in the Franchise Agreement. Any Improvement may be used by Liberty and all other franchisees as authorized by Liberty without any obligation to Franchisee for royalties or other fees. Franchisee hereby assigns and agrees to assign any future right, title, or interest in and to the Improvements, including the right to grant sublicenses. Liberty, at its discretion, may make application for and own copyrights, patents, trade names, trademarks, and service marks relating to any Improvement and Franchisee must cooperate with Liberty in securing any rights. Liberty may also consider the Improvement as the property and trade secret of Liberty. In return, Liberty will authorize Franchisee to use any Improvement that may be developed by other franchisees and that is authorized for use by other franchisees. If requested by Liberty, Franchisee must: (A) return to Liberty all copies of the Program and System and all copies of any user’s guide to the software, whether or not the software or guide was furnished by Liberty, upon expiration or termination of this Agreement, and (B) sign a certificate, in a form defined by Liberty, that no copies of the software or guide have been retained by Franchisee. Franchisee has read the foregoing restrictions and acknowledges that the restrictions are reasonably required for the protection of the interests of Liberty. Franchisee further acknowledges that this Agreement would not be entered into by Liberty unless these restrictions are included in this Agreement and enforceable by injunctive relief in the event of a breach by Franchisee.
13. Hardware, Equipment, Supplies, and Other Expenses. Franchisee must provide, install, and operate, at Franchisee’s own expense, computers, modems, printers (“Hardware”), and all other equipment, supplies, and forms necessary. The Hardware must meet the exact Hardware configurations specified by Liberty. Franchisee acknowledges that by installing the Program and System, Liberty may during the Term receive configuration records setting forth Franchisee’s computer configuration information and other data.
14. Reports and Inspections. Franchisee must also submit reports that may be required by Liberty in connection with the Program and System. Franchisee’s books and records pertaining to its use of the Program and System, all information stored either in the computer Hardware in which the Program and System are used, on disks, or other computer data storage devices, and the actual operation of the Program and System in the computer Hardware used by Franchisee must be open to inspection by Liberty to comply with the terms set forth in this Agreement and in the Franchise Agreement.
15. Franchisee’s Conduct of Business. Franchisee must use the Program and System in full compliance with (a) all provisions of this Agreement and the Franchise Agreement; (b) the Specifications and any other rules or regulations published by the IRS relating to the electronic filing of tax returns and the direct deposit of income tax refunds; (c) any other applicable laws, rules, or regulations of any federal, state, or local governmental body; (d) the procedures, guidelines, and restrictions adopted by Liberty for Franchisee’s use of the Program and System; and (e) in accordance with the Operations Manual. Franchisee acknowledges that any procedures, guidelines, and restrictions adopted by Liberty may, at Liberty’s discretion, differentiate Franchisee from other Liberty franchisees using the Program and System on the basis of the location, volume history, or other characteristic of the Franchised Business or the duration of Franchisee’s participation in Electronic Filing Services.
16. Compliance with Bank Agreement. Franchisee agrees to comply with any obligations or restrictions imposed upon Franchisee under the terms of any agreement pertaining to Electronic Filing Services to which Franchisee and any lending institution designated by Liberty (“Bank”) are parties in connection with Electronic Filing Services (“Bank Agreement”) and in the procedures, guidelines, and restrictions adopted by Liberty for Electronic Filing Services. Franchisee’s obligation to use Electronic Filing Services includes, but is not limited to, compliance with all provisions found in the Bank Agreement, Specifications, laws, procedures, guidelines, and restrictions that relate to Franchisee’s care, custody, handling, issuance, and delivery of Electronic Filing Services’ disbursement checks and processing, under appropriate circumstances, of stop-payment orders relating to any checks. Upon termination of the Bank Agreement, Franchisee’s Electronic Filing Services relating to the Bank Agreement will terminate. If Franchisee fails to comply with Franchisee’s obligations under this section, Franchisee’s right to use the Program and System may, at Liberty’s sole discretion, be terminated immediately upon Liberty’s written termination notice.
18. Modifications by Liberty. Liberty has the right to (a) eliminate or modify the method of Franchisee’s use of the Program and System, (b) eliminate or modify any of the Services that comprise the Electronic Filing Services, or (c) change the exact Hardware configurations for Hardware used in the Program and System. If Liberty elects to make any of the foregoing modifications, Liberty will notify Franchisee of the date the modification is effective.
19. Exclusivity. The Electronic Filing Services will be the only electronic filing service offered to Franchisee and Franchisee must not use any software or system other than the Program and System unless pre-authorized in a separate written agreement with Liberty.
20. Disclaimer of Warranties. Liberty makes no representation or warranty as to: (a) the reliability or fitness of the Program and System or any enhancements or modifications thereto, the success or profitability to Franchisee of the Services conducted under this Agreement by Franchisee, (b) the future of electronic filing of tax returns, the direct deposit of income tax refunds, Refund Transfers (“RTs”) (formerly known as refund anticipation checks or RACs , refund anticipation loans (“RALs”), debit card, or any other settlement products or the IRS’s confirmed acceptance of these products and services, or (c) whether Liberty will continue to offer its Program and System for preparation of returns and electronic filing. Liberty does not represent or guarantee that Franchisee’s use of the Program and System will be more advantageous, efficient, or profitable than Franchisee’s current methods of operation. Liberty will make its best effort but does not guarantee to correct any errors or defects in the Program and System. The Program and System are authorized for use under this Agreement solely on an “as is” basis. LIBERTY DISCLAIMS ALL WARRANTIES, WHETHER EXPRESS OR IMPLIED, WITH RESPECT TO LIBERTY’S PROGRAM AND SYSTEM OR USE OF ELECTRONIC FILING SERVICES. ALL WARRANTIES, EXPRESSED OR IMPLIED, INCLUDING THE WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE, TITLE, NON-INFRINGEMENT, OR MERCHANTABILITY, OR ANY OTHER STATUTORY OR COMMON LAW WARRANTIES, ARE HEREBY EXPRESSLY DISCLAIMED AND EXCLUDED BY LIBERTY.
21. Limitation of Liability; Indemnification. Liberty and its related entities, affiliates, directors, officers, shareholders, employees, agents, and successors are not liable to Franchisee or to any other party for any loss, damage, or expense arising out of or resulting from nonoccurrence of: (a) the conditions set forth in Section 5; (b) the performance or nonperformance of the Program and System, or any delay in performance of the Program and System; (c) any failure to promptly and accurately transmit Client Data by Franchisee; (d) any failure of Bank to perform its obligations in connection with Electronic Filing Services; (g) Franchisee’s use of the Program and System; or (h) Franchisee’s operation of Electronic Filing Services Franchisee will bear all responsibility and liability for the accuracy and timeliness of Client Data transmitted by Franchisee. Franchisee assumes sole responsibility and liability for, and will indemnify Liberty against, and will hold them harmless from, any loss, cost, damage, or expense including the payment of penalties or interest pursuant to: (a) Liberty’s guarantees; or (b) the requirements of the IRS in connection with the electronic filing of income tax returns arising out of or resulting from: (1) any act, error, or omission committed by Franchisee or Franchisee’s agents or employees in the preparation of any tax return for which the Electronic Filing Services are used; (2) any act, error, or omission committed by Franchisee or Franchisee’s agents or employees in use of Electronic Filing Services or the Program and System; (3) any loss, alteration, misuse, or improper issuance or delivery of Electronic Filing Services’ disbursement checks or debit card, whether by Franchisee, Franchisee’s agents or employees, or any third person, resulting from any occurrence after any [delivery of check stock or debit card to Franchisee](Note: the franchisee prints out the check in his or her office) and prior to, or concurrent with, Franchisee’s delivery of any check or debit card to Liberty’s client; (4) any act, error, or omission committed by Franchisee’s agent in entering Client Data into a computer or in transmitting Client Data; or (5) Franchisee’s performance of its obligations under this Agreement, including, but not limited to, its obligation to transmit to Liberty or another party, accurate Client Data in a timely manner.
22. Termination. This Agreement is subject to immediate termination under certain conditions.
22.1 Termination of the Franchise Agreement. This Agreement will terminate immediately upon termination of the Franchise Agreement. If Franchisee has used Electronic Filing Services under one or more separate Franchise Agreements and some, but not all, of the separate Franchise Agreements are terminated, this Agreement will terminate only with respect to those separate Franchise Agreements that have been terminated. If the Parties are parties to one or more addenda to the Franchise Agreement, and one or more addenda are terminated separately from the Franchise Agreement, the rights granted to Franchisee in this Agreement will terminate only with respect to the addenda that have terminated.
22.2. Termination of the Franchise Agreement. This Agreement will terminate on the effective date of any termination of the Franchise Agreement by Liberty.
22.3 The IRS Denies Electronic Filing Services. This Agreement will terminate immediately if: (A) the IRS refuses to accept Franchisee’s participation in Electronic Filing Services; (B) the IRS suspends Franchisee from using Electronic Filing Services; or (C) the IRS generally refuses to accept any tax returns electronically filed by Liberty, Franchisee, or Franchisee’s agent for filing electronically.
22.4 Suspected Violation of Law. This Agreement will terminated immediately if Liberty reasonably suspects violation of law, ordinance or regulation occurring at the franchised business.
22.4 Breach of this Agreement. If Franchisee materially and substantially breaches the terms of this Agreement, Liberty must provide written notice of the breach to Franchisee. If the default is curable, Franchisee will have 15 days (or as otherwise permitted under state law) from the date the notice is given to cure the default. If the default is not curable at Liberty’s sole discretion, this Agreement will terminate immediately upon written notice of termination to Franchisee.
23. Obligations Surviving Termination. Franchisee’s obligations surviving termination under the Franchise Agreement will continue following termination of this Agreement.
24. Information Security. During the Term of this Agreement, Franchisee will abide by all terms of the Franchise Agreement, Operations Manual, any other applicable document and all applicable laws, regulations and ordinances, including all information security and data privacy policies, and will be responsible for ensuring that all employees, agents, or independent contractors of the Franchised Business abide by the information security and data privacy policies, as well as all applicable laws, regulations and ordinances.
25. Relation of Parties. Nothing in this Agreement creates any principal-agent, partnership, joint liability, joint venture, joint employer, or any relationship between the Parties other than that of franchisor and franchisee. Neither party has any right or authority to incur any expense or liability on behalf of the other party without the other party’s prior written consent. Neither party will be liable to a third party for debts incurred by the other party.
26. Notices. Except as otherwise expressly provided in this Agreement, all notices must be in writing and
are sufficiently given on the date delivered by hand, facsimile, email, or other electronic system; or on the
date mailed postage prepaid by certified or registered mail; or deposited with reputable air courier service
requesting next day or earliest delivery date available addressed as follows or to any other address, email
address, or facsimile number that may be designated by either party to the other within the Program and
System:
To Franchisor:
JTH Tax, Inc. d/b/a Liberty Tax Service
Legal Department
1716 Corporate Landing Parkway
Virginia Beach, Virginia 23454
To Franchisee:
Via issue tracker or via notice to the address or email address referenced in the Franchise Agreement or
as otherwise updated in Liberty’s database.
Notice to Franchisee is effective by any means described above to the address or email address on record
on the date of attempted delivery regardless of Franchisee’s failure to provide an
accurate address or refusal to sign for or accept any notice.
27. Integration and Amendments. This Agreement, any signed addenda hereto, and the related provisions of any separate Franchise Agreement express fully the agreement of the Parties to this Agreement regarding Franchisee’s use of the Program and System, and all prior understandings or commitments of any kind, whether oral or written, concerning any matter covered by this Agreement are hereby superseded and canceled with no further liabilities or obligations of the Parties except as to: (a) any monies due and unpaid between the Parties at the time of the execution of this Agreement, and (b) any liabilities or obligations that survive the termination of any prior Franchise Electronic Filing Agreement or Franchise Agreement between the Parties by the express terms of the prior agreement. Except as provided otherwise, this Agreement may not be amended or modified other than by a written agreement signed by both Parties.
28. Partial Invalidity. If any provision of this Agreement is determined to be invalid, illegal, or incapable of being enforced by reason of any rule of law or public policy, all other conditions and provisions of this Agreement will remain in full force and effect.
29. Waiver. No waiver of any term or condition of this Agreement is valid unless it is in writing and signed by the party to be bound. No waiver of any term or condition regarding any act or event will be a waiver of any term or condition with respect to any subsequent act or event.
30. Applicable Law. This Agreement will be construed according to the laws of the state to which the choice of law provision of the Franchise Agreement applies.
31. Binding Effect; Assignability. This Agreement is binding upon the Parties and their respective successors, assigns, heirs, executors, administrators, and legal representatives; provided, however, that this Agreement may not be assigned by Franchisee, by operation of law or otherwise, without the prior written consent of Liberty. This Agreement will be considered entered into in Virginia Beach. Virginia.
32. Headings. The headings of the various sections of this Agreement have been inserted for reference only and
are not part of this Agreement.