Contract Negotiation for a Restaurant/Retail Organization
Background – Three Concurrent Software Selections & Contract Negotiations
ITDirections was engaged by a large restaurant chain of 92 restaurants nationwide (company-owned and franchised). The Client requested help to select software and negotiate contracts for Financials, Restaurant Back Office, and Labor Scheduling.
The Challenge – Risk of Over-Committing
The Client did not have the resources to implement all three systems concurrently, and as a result, the software packages were to be implemented sequentially. However, the software was purchased up-front to take advantage of bulk pricing opportunities and incentives.
The Solution – Out-Clause
Using leverage and a keen awareness of what could potentially happen in the future, several terms were negotiated as protection in the contact. Specifically, one of these provisions provided an out-clause (at the Client’s discretion) that allowed for the return of the unused software licenses for a full refund if they chose to delay or cancel the implementation of the third system.
The Results – $100K Savings
During our standard 9-month post-negotiation check-up with the Client, they mentioned that priorities changed and they did not plan to implement the last software package. The Client had forgotten about the previously negotiated out-clause. ITDirections reminded them of their option, and they exercised their right to return the software and received $100K back that they could invest elsewhere.