Does CDI have an obligation to enter into subsequent COAs with a Chem-Dry franchisee?
Chem_Dry Franchise · 2024 FDDAnswer from 2024 FDD Document
-Dry franchise, Franchisee agrees to pay CDI a nonrefundable administration fee of $500.00 as consideration for the privilege of headquartering all Franchises from a single office location.
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- This COA will expire with the Franchise Agreement, and is non renewable and non-transferrable.
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- Pursuant to section 11 of the Agreements, Franchisee agrees to maintain and preserve full and accurate books for each franchise headquartered at the single office location.
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- Upon expiration of this COA, Franchisee may be eligible to enter into a second COA with CDI so long as Franchisee notifies CDI of its desire to do so at least sixty (60) days prior to the expiration of this COA. Any subsequent COAs will be upon then current terms and conditions and will require payment of the then current fee.
Source: Item 23 — Receipts (FDD pages 68–264)
What This Means (2024 FDD)
According to the 2024 Chem-Dry Franchise Disclosure Document, Chem-Dry franchisees who have a Consolidated Office Agreement (COA) may be eligible to enter into a second COA with CDI (the franchisor). To do so, the franchisee must notify CDI of their desire at least sixty (60) days before the expiration of the current COA. Any subsequent COAs will be subject to the terms and conditions then in effect, and will require payment of the then-current fee.
However, Chem-Dry explicitly states that it has no obligation to enter into subsequent COAs with the franchisee. Whether or not Chem-Dry enters into a new COA is at its sole discretion. If Chem-Dry chooses not to enter into a new COA, the franchisee must move all franchise operations to office locations within the designated franchised areas for each franchise by the expiration date of the current COA. Failure to do so constitutes a material breach of the Franchise Agreement.
In summary, while a Chem-Dry franchisee can request a subsequent COA, Chem-Dry is under no obligation to grant it, and the franchisee must be prepared to relocate their franchise operations if a new agreement is not reached.