What does CDI recommend regarding the Chem-Dry franchisee's participation in the direct operation of the Chem-Dry Business?
Chem_Dry Franchise · 2024 FDDAnswer from 2024 FDD Document
You are not obligated to participate personally in the direct operation of your Chem-Dry Business although CDI recommends that you do so. You are responsible for the successful operation of the Chem-Dry Business and are directly responsible to us under the Franchise Agreement whether or not you participate in day-to-day operations. If you choose to use an operator to run the business, the operator must be disclosed to us and is obligated to complete CDI's Initial Training/New Buyer Training and other training program(s) successfully within 90 days of the start of their employment with your business. You remain obligated to complete New Buyer Training within 90 days after you sign the Franchise Agreement.
The operator is not required to have any ownership interest in the Chem-Dry Business. You must require the operator to sign an agreement in which the operator agrees not to divulge any trade secret or confidential or proprietary information, including the contents of the Manual, or to engage in or have any interest in any competitive business. You must pay for any additional training that CDI requires
for an employee that CDI, in its sole discretion, deems unqualified because the employee cannot complete training successfully. You are not permitted to utilize independent contractors to provide services to Business customers. In addition, you cannot subfranchise, sublicense or delegate your franchise rights.
If you are a corporation, limited liability company, partnership, or other entity, each of your owners, members, shareholders, partners, or officers must personally guaranty your obligations under the Franchise Agreement and agree to be bound personally by every contractual provision, whether containing monetary or non-monetary obligations, including the covenant not to compete. This "Guaranty and Assumption of Obligations" is Exhibit B of the Franchise Agreement.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 50–51)
What This Means (2024 FDD)
According to Chem-Dry's 2024 Franchise Disclosure Document, while franchisees are not obligated to participate personally in the direct operation of their Chem-Dry business, CDI (presumably Chem-Dry Franchising, Inc.) recommends that they do so. Regardless of whether the franchisee is involved in day-to-day operations, they remain responsible for the successful operation of the business and are directly accountable to Chem-Dry under the Franchise Agreement. This means that even if a franchisee hires someone else to manage the business, the franchisee is still ultimately responsible for ensuring the business meets Chem-Dry's standards and obligations.
If a Chem-Dry franchisee chooses to employ an operator to run the business, they must disclose the operator to Chem-Dry. The operator is required to complete Chem-Dry's Initial Training/New Buyer Training and other training programs successfully within 90 days of starting employment. The operator does not need to have any ownership interest in the Chem-Dry business. The franchisee must also ensure the operator signs an agreement promising not to reveal any trade secrets, confidential information, or proprietary information, including the contents of the Manual, and agreeing not to engage in any competitive business.
Furthermore, the Chem-Dry franchisee is responsible for covering any additional training costs that Chem-Dry deems necessary if an employee is unqualified and cannot complete the training successfully. The franchisee is not allowed to use independent contractors to provide services to customers. Additionally, subfranchising, sublicensing, or delegating franchise rights is prohibited. If the franchisee is a corporation, limited liability company, partnership, or other entity, each owner, member, shareholder, partner, or officer must personally guarantee the obligations under the Franchise Agreement, including the covenant not to compete.