What agreement must Chem Dry franchisee owners with more than 5% ownership interest execute?
Chem_Dry Franchise · 2024 FDDAnswer from 2024 FDD Document
If CDI grants a renewal franchise, CDI and FRANCHISEE and the owner(s) of FRANCHISEE shall execute CDI's then current form of franchise agreement and such ancillary agreements as are used in offering franchises for the ownership and operation of CHEM-DRY Businesses (with appropriate modifications to reflect the fact that the agreements relate to the grant of a renewal franchise; including but not limited to, that FRANCHISEE shall not have a right to obtain a renewal franchise beyond the renewal term), and FRANCHISEE and its owner(s) shall execute a general release, in a form satisfactory to CDI, releasing, to the extent permitted by applicable law, any and all claims against CDI and its respective affiliates, shareholders, officers, directors, employees and agents. Failure by FRANCHISEE and its Owner(s) to sign such agreement(s) and release by the earlier of thirty (30) days before expiration of the Term or ninety (90) days after delivery thereof to FRANCHISEE shall be deemed an election by FRANCHISEE not to acquire a renewal franchise.
Source: Item 23 — Receipts (FDD pages 68–264)
What This Means (2024 FDD)
According to the 2024 Chem Dry Franchise Disclosure Document, if a Chem Dry franchisee qualifies for a renewal franchise, both the franchisee and the owners of the franchisee are required to execute Chem Dry's current form of franchise agreement. They must also sign any ancillary agreements that Chem Dry uses when offering franchises for the ownership and operation of Chem Dry businesses. These agreements will be modified to reflect that they relate to the grant of a renewal franchise, clarifying that the franchisee does not have the right to obtain a renewal franchise beyond the renewal term.
In addition to the franchise agreement and ancillary agreements, the franchisee and its owners must execute a general release in a form that is satisfactory to Chem Dry. This release, to the extent permitted by law, releases any and all claims against Chem Dry and its affiliates, shareholders, officers, directors, employees, and agents.
Failure by the franchisee and its owners to sign the required agreements and release by the earlier of 30 days before the expiration of the term or 90 days after delivery of the documents to the franchisee will be deemed as an election by the franchisee not to acquire a renewal franchise. This condition underscores the importance of timely compliance with the renewal requirements to maintain the franchise rights.