Domino's Franchise Association Prevails in "Pulse" Dispute with Franchisor

Judge Rules Franchisor Cannot Force Franchisees to Purchase Point-of-Sale Computer System

MINNEAPOLIS, Minn. (Blue MauMau) - 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.

Danny Malamis, Chief Executive Officer of Domino's Franchisee Association (DFA), writes:

"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 (DFA) 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.

This area of commerce is increasingly important. Domino's spent years developing the Pulse system, no doubt in part to track and use information about consumer preferences.