What is the amount of the Month-to-Month Post Term Franchise Fee for a Chem Dry franchise?
Chem_Dry Franchise · 2024 FDDAnswer from 2024 FDD Document
| Name of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| during the term of the Franchise Agreement with the first attendance occurring during the first three years of the agreement term. | |||
| Month-to Month Post Term Franchise Fee | Two times the then-current monthly 1 Franchise Fee | 10th day of month | Begins the 10th of the month following the expiration of your Franchise Agreement and continues each month you continue to operate the Business until you sign a successor Franchise Agreement, or you cease operating the Business. This fee must be paid via electronic funds transfer. |
Source: Item 6 — OTHER FEES (FDD pages 19–26)
What This Means (2024 FDD)
According to Chem Dry's 2024 Franchise Disclosure Document, the Month-to-Month Post Term Franchise Fee is two times the then-current monthly Franchise Fee. This fee is due on the 10th day of each month, beginning the 10th of the month following the expiration of the Franchise Agreement. It continues each month the franchisee continues to operate the Chem Dry business until a successor Franchise Agreement is signed, or the business ceases operation. The fee must be paid via electronic funds transfer.
This means that if a Chem Dry franchisee continues to operate the business after the franchise agreement expires but before a new agreement is signed, they will be required to pay double the standard monthly franchise fee. This higher fee serves as an incentive to either renew the franchise agreement or cease operations.
It is important for prospective Chem Dry franchisees to understand this post-term fee, as it can significantly impact their financial obligations if they choose to continue operating the business without a valid franchise agreement. Franchisees should factor this potential cost into their long-term financial planning and consider the implications of not renewing their agreement promptly.
Franchisees should also be aware that the 'then-current monthly Franchise Fee' could be subject to change, potentially increasing the amount of the post-term fee. It would be prudent to discuss with Chem Dry the typical range and frequency of changes to the monthly franchise fee to better anticipate potential post-term costs.