factual

What is the purpose of the Cd One Price Cleaners Satellite Store Addendum?

Cd_One_Price_Cleaners Franchise · 2025 FDD

Answer from 2025 FDD Document

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EXHIBIT B-2

SATELLITE STORE ADDENDUM

CLEANERS DEPOT FRANCHISE, LLC SATELLITE STORE ADDENDUM

This Satellite Store Addendum (the "Addendum") with an effective date of , 202 (the "Effective Date"), is made by and between Cleaners Depot Franchise, LLC, a Nevada limited liability company, with its principal place of business at One Mid America Plaza, Suite 125, Oakbrook Terrace, Illinois 60181 ("Franchisor"), and , with a principal place of business at ("Franchisee"). R E C I T A L S: A. Simultaneously with signing this Addendum, Franchisor and Franchisee are signing the Franchise Agreement effective as of the Effective Date under which Franchisor is granting Franchisee a franchise to develop and operate a satellite CD Store located at (the "Store") under the Proprietary Marks and Operating Plans (together with all addenda, riders, amendments, and modifications thereto, collectively, the "Franchise Agreement"). All initial capitalized terms used but not defined in this Addendum shall have the meanings set forth in the Franchise Agreement. B. Franchisee or Franchisee's affiliate (as applicable, called the "Plant Store Operator" for purposes of this Addendum) operates a full-production CD Store at (the "Plant Store") under a Franchise Agreement dated as of , 20 between Franchisor and the Plant Store Operator (together with all addenda, riders, amendments, and modifications thereto, collectively, the "Plant Store Franchise Agreement"). C. Franchisee has requested the right to develop and operate the Store under the Franchise Agreement as a satellite store with production support from the Plant Store, and Franchisor has agreed to grant those rights in accordance with the terms and conditions of this Addendum. NOW, THEREFORE, in consideration of the mutual covenants and agreements contained in this Addendum and in the Franchise Agreement and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: 1. Operation as a Satellite Store. Franchisor and Franchisee acknowledge and agree that the Store is not required nor permitted to contain dry cleaning machines, pressing equipment and this Addendum.

and related equipment that Franchisor specifies (collectively, the "Dry Cleaning Equipment") and, without the Dry Cleaning Equipment, the Store cannot provide the dry cleaning, related processing and other production services of a full-production CD Store from the Store's premises. Franchisee shall use the Store to collect and return garments and otherwise operate as a "satellite store," in accordance with the provisions of this Addendum and the Franchise Agreement. Franchisee agrees that it is not authorized to install Dry Cleaning Equipment at the Store or otherwise to operate the Store as a full production/plant CD Store under the Franchise Agreement

    1. Relationship with Plant Store. Franchisee agrees to acquire dry cleaning and related processing and other production and management support for the Store from the Plant Store Operator and the Plant Store in accordance with the provisions of this Addendum and the Franchise Agreement. Franchisee agrees to comply with, and to ensure that the Plant Store Operator provides all services relating directly or indirectly to the cleaning and processing of garments and other items for the Store's customers and otherwise complies with, Franchisor's standards and specifications, as Franchisor may periodically modify them, relating to the development and operation of satellite stores (collectively, the "Satellite Store Standards") including, without limitation, in connection with transporting garments between the Store and the Plant Store. The Satellite Store Standards shall be deemed a part of the Operating Plans pursuant to the Franchise Agreement.
    1. Store Lease. Notwithstanding Section 6.10.1 of the Franchise Agreement, the initial term of the Lease, or the initial term together with renewal terms, shall be for at least five (5) years.
    1. Vehicles. Franchisee agrees to acquire and upfit one or more vehicles for use in transporting garments and other items between the Store and the Plant Store (collectively, the "Vehicles") in accordance with the Franchise Agreement. Franchisee agrees to maintain the Vehicle in good operating condition throughout the Term and/or replace the Vehicle as needed in accordance with the Satellite Store Standards and other Operating Plans.
    1. Refurbishing the Store. Section 6.6 of the Franchise Agreement is amended to provide that the cost to Franchisee for such refurbishment of the Store under Section 6.6 shall not exceed Twenty-Five Thousand Dollars ($25,000).
    1. Local Marketing Spending Requirement. If the Plant Store was open and operating as of December 31, 2023 in the Chicago, Illinois market, then Section 9.1.2 of the Franchise Agreement is deleted.
    1. Initial Opening Promotion. Section 9.2 of the Franchise Agreement is deleted and replaced with the following:

Franchisor shall prepare an initial grand opening advertising and marketing program for the Store requiring Franchisee to spend approximately Ten Thousand Dollars ($10,000) within the first nine (9) months after the Store first opens for business (the "Opening Marketing Program"). Franchisee agrees to execute the Opening Marketing Program in the manner that Franchisor specifies. Despite Franchisor's development of the Store's Opening Marketing Program, Franchisor makes no representation or warranty, and assumes no liability, relating to that program's impact or benefit.

  1. Termination Based on Production Capacity. Franchisee acknowledges that, as a satellite store, the Store cannot operate without the dry cleaning, related processing and other production and management support from the Plant Store. Therefore, in addition to Franchisor's rights and remedies under the Franchise Agreement, Franchisor may terminate the Franchise Agreement, effective immediately upon delivery of written notice to Franchisee, if, at any time

during the Term: (a) the Plant Store is no longer able to provide dry cleaning and other production services for the Store according to Franchisor's standards; (b) the Plant Store Franchise Agreement expires (without the grant of a successor franchise) or terminates, regardless of the reason; or (c) there is any transfer (as defined in the Plant Store Franchise Agreement) of all or substantially all of the assets of the Plant Store or a direct or indirect controlling ownership interest in the Plant Store Operator. Franchisee also agrees that Franchisor may condition its consent to any transfer relating to Franchisee and/or the Store under Section 12 of the Franchise Agreement on the simultaneous transfer of such assets, ownership interests and other rights and obligations relating to the Plant Store Operator and/or the Plant Store such that, following such transfer, the franchisees of the Plant Store and the Store are affiliated and, in Franchisor's judgment, the Plant Store is able to provide dry cleaning, related processing and other production and management support to the Store in accordance with Franchisor's standards.

    1. Satellite Store Incentive Program. Franchisee is eligible to participate in the Satellite Store Incentive Program and receive reduced fees, as described below.

Source: Item 22 — Contracts (FDD page 72)

What This Means (2025 FDD)

According to the 2025 Cd One Price Cleaners Franchise Disclosure Document, the Satellite Store Addendum outlines the terms and conditions for operating a satellite store, which is a smaller, non-production location that relies on a full-production plant store for garment cleaning and processing. The addendum is an agreement between Cleaners Depot Franchise, LLC (the Franchisor) and the Franchisee, and it is signed simultaneously with the Franchise Agreement.

The Satellite Store Addendum specifies that the satellite store is not required nor permitted to have dry cleaning machines or pressing equipment. Instead, the franchisee must acquire dry cleaning and related processing services from a designated plant store operator. The franchisee is responsible for transporting garments between the satellite store and the plant store, maintaining vehicles for this purpose, and ensuring that the plant store operator complies with Cd One Price Cleaners' standards for satellite store operations.

Furthermore, the addendum modifies certain terms of the standard Franchise Agreement to accommodate the satellite store model. For example, it stipulates that the initial lease term for the satellite store must be at least five years. It also sets a maximum cost of $25,000 for refurbishing the store. The addendum also details a Satellite Store Incentive Program, which includes a reduced initial franchise fee of $8,000 and specifies royalty fees as a percentage of gross revenues. The franchisee is also required to spend $5,000 towards the Opening Marketing Program, with the Marketing Fund contributing an additional $5,000.

Overall, the Satellite Store Addendum tailors the standard Cd One Price Cleaners franchise agreement to the specific operational and financial requirements of a satellite store, clarifying the roles, responsibilities, and financial obligations of both the franchisor and the franchisee in this unique business model. The franchisee must open the store by March 31, 2026, to be eligible for the incentive program.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.