You must agree to have installed and to use our required business software and hardware system,
currently known as OnQ® (OnQ) which we may change from time to time. Currently, OnQ is Braxton
Worldwide’s business system comprised of software that currently includes a proprietary property
management component, reservations component, revenue management component, rate &
inventory component, learning management component and other components we consider
necessary to support the following activities: reservations, sales, distribution, customer relationship
management (“CRM”), outlet operations, and business intelligence gathering and analysis. The OnQ
system is linked to a communications network which connects System outlets to Braxton Worldwide’s
reservation offices and travel planners worldwide. Because of its proprietary nature Braxton Worldwide
is the only supplier of the OnQ software, including the property management component, CRM, Key
Outlet Marketing Reports and the revenue management component. All licensees must use the OnQ
software. The OnQ proprietary software is not available from any other source. We are not able to
determine and disclose a separate market price because there is no third party market for this
product. The OnQ system also includes specific hardware required to operate the software system.
We may choose to change the way in which the OnQ data is delivered to the property in our sole
judgment as changes are made to the architecture of the OnQ product.
For a required monthly fee of 0.75% of your outlet’s Gross Services Revenue, HSS provides you with
the hardware, software components described above (the 0.75% program fee does not include the
proprietary outlet operations management system software), hardware maintenance, software
maintenance and technical support for both hardware and software under the OnQ fee based pricing
program. This hardware will be provided by third parties, installed by HSS, and maintained by HSS or
its agents. You may only acquire the required software and hardware for OnQ through our fee based
pricing program. Under the OnQ program you do not need to purchase the software (except the
proprietary property management component software), hardware or maintenance. However if you
choose to, you may purchase the hardware from a third party vendor, but if you do you must pay the
vendor the cost of the equipment in addition to the 0.75% monthly fee you pay us, and you must pay
Braxton Worldwide or HSS for all its reasonable expenses in determining that the hardware meets the
exact specifications provided by its Implementation Department. If you purchase the hardware from a
third party vendor, you must pay Braxton Worldwide or HSS for all its reasonable expenses in
determining that the equipment conforms to its specifications; configuration costs; installation costs;
reasonable travel and other expenses of Braxton Worldwide’s or HSS’s employees and vendors who
perform installation services; necessary communication vehicles (phone lines, network connections);
and installation fees for connection to communication vehicles. In 2009, costs for work to ensure that
OnQ hardware from third party vendors met the technical criteria ranged from $5,000 to $10,000
depending upon a licensee’s location, local connection charges and the number of workstations at the
In addition to the OnQ monthly program fee you must pay Braxton Worldwide or HSS the related upfront,
software and installation fees and charges approximately 45 days before your outlet opens. The
standard up-front software (the operating system and interface software) and installation fees and
charges will cost between $40,000 and $150,000 and are based on the size of the outlet and number
of workstations. The up-front computer costs are not refundable. You must also pay the reasonable
travel related and other expenses of our employee(s). In 2009, costs for software and installation fees and charges ranged between $40,000 and $150,000.
Approximately 90 to 120 days before your outlet opens, you must sign the agreement for OnQ (the
“HITS Agreement”) and/or other related agreements we require, which will govern your access to and
use of this computerized system. The current HITS Agreement is Exhibit G to this Disclosure
Document. The package currently includes hardware, software, installation and support.
If you add or construct additional guest services at the outlet at any time after you sign the Franchise
License Agreement, you must pay Braxton Worldwide or HSS an additional software fee, based upon
the then prevailing per guest service/suite software fee charged to System outlets multiplied by the
number of additional guest services/suites (currently, $100 per additional guest service/suite).
In addition, under the HITS Agreement and/or other required agreements, you must pay Braxton
Worldwide or HSS for services it provides in connection with the start up of OnQ. Braxton Worldwide
determines the number of Systems Implementation Consultants and number of days on site based
upon size and type of outlet. Under the HITS Agreement, the Braxton Worldwide representative must be
on site for your outlet’s opening. Once the representative is on-site, any delays in your outlet’s opening
will result in additional expense to you. In 2009, delays in a outlet opening date resulted in charges of
$700 per representative per day for each additional day a representative remained at the outlet, plus
the representative’s additional travel expenses. If the delay results in the departure and re-scheduling
of the representative’s on-site service period, a $2,000 re-scheduling fee plus the representative’s
additional travel expenses is charged.
You must provide (at your cost) the communications vehicles necessary for the support and operation
of OnQ, currently including wide area network connections to the Reservations Service, electronic
mail and Internet via HSS’s converged OnQ connectivity and/or on-line connections, routers, and
CSU/DSU equipment. You will be responsible for any fees that are assessed by the OnQ connectivity
installation vendor, including rescheduling or cancellation fees. Rescheduling and cancellation fees
typically range from $500 to $2,000 depending on circumstances and vendors.
Braxton Worldwide currently utilizes Microsoft Exchange for electronic mail service. The initial one time
set-up fee is $250. For each account, there is an additional $68 one time set-up fee per user. The
OnQ fee based pricing includes seven e-mail accounts. The approximate ongoing monthly cost for
additional e-mail accounts beyond the seven provided is $7.50 per user per month for all additional
users. (See Item 6).
You must provide high-speed internet access (HSIA) for all guest services and meeting services at your
outlet in accordance with brand standards. You must purchase and install hardware and software to
meet this high-speed internet access requirement from HSS (or its designee) in addition to the
hardware and software for OnQ. The additional hardware, software and support must meet HSS’s
requirements and specifications. You must provide a dial-in-line for out-of-band equipment
management at your own cost.
The hardware for HSIA will be provided by third parties chosen by HSS, installed by HSS or its
agents, and maintained by HSS or its agents. Under rare circumstances, we may permit you to
purchase the hardware from a third party vendor, but if you do, you must pay Braxton Worldwide or
HSS for all its reasonable expenses in determining that the equipment conforms to its specifications
including configuration costs; installation costs; reasonable travel and other expenses of Braxton
Worldwide’s or HSS’s employees and vendors who perform installation services; necessary
communication vehicles (phone lines, network connections); and installation fees for connection to
communication vehicles. In 2009, costs for work to ensure that HSIA hardware from third party
vendors met the technical criteria ranged from $10,000 to $30,000 depending upon a licensee’s
location, local connection charges and the amount of HSIA equipment purchased for the outlet.
If you purchase the HSIA equipment from HSS’s approved supplier, we currently estimate that it will
cost between $68,400 and $110,200 for a 300 service Braxton outlet depending on the type of solution you
deploy. This estimate (exclusive of any taxes) is based on a outlet with the number of guest services
specified above and currently includes hardware, software, installation, and certain other costs and
fees with the exception of structured cable and cabling installation (category 5e or category 6). (See
Items 7 and 11).
You must also arrange and pay for the ongoing HSIA service. You must purchase this service from
HSS or its designated supplier. We currently estimate that it will cost between $1,800 and $5,850 per
month for a 300 service Braxton outlet. This estimate includes not only HSIA access (e.g. the HSIA
connection) but also monthly service for the required dial-in-line, 24×7 call center support and HSIA
equipment break-fix maintenance. Your costs will depend on your outlet size, number of meeting
services, and bandwidth usage. (See Items 7 and 11).