Is CDI required to conduct advertising for the Chem-Dry franchise system?
Chem_Dry Franchise · 2024 FDDAnswer from 2024 FDD Document
(Franchise Agreement - Section 3.B. and 7).
- (6) Provide advertising materials for purchase. You are responsible for all advertising and promotion of your Chem-Dry Business. CDI is not required to conduct advertising for the franchise system and does not currently administer any advertising fund or any local or regional advertising cooperative in which you must or may participate although we reserve the right to establish a national advertising fund in the future. There is no advertising council composed of franchisees that advises us on advertising policies. (Franchise Agreement - Section 10.).
- (7) Properly fill, as market conditions allow, all orders for supplies, cleaning solutions and equipment provided you are current in your financial obligations to CDI (Franchise Agreement - Section 8.B.).
- (8) Be responsible for all billings to and collections from national accounts. CDI will remit to you all of the payments we receive from completed national accounts that you service minus a handling and processing fee ranging between 15% - 25% of the amount collected, depending on the terms of the national account, and any payments for state sales or other tax CDI may be required to pay. (See Item 6.)
Other than those items listed above, CDI has no further obligation to assist you during the operation of the Chem-Dry Business in developing products and services you will offer your customers, hiring and training employees, improving and developing the Chem-Dry Business, establishing prices, establishing and using administrative, bookkeeping, accounting and inventory control procedures, or resolving operating problems you encounter.
Advertising and Promotions
All advertising, promotion and marketing must be completely clear and factual and not misleading and conform to the highest standards of ethical marketing and the promotion policies which CDI prescribes from time to time. You also must follow our standards and specifications regarding use of social media in any way that references the Marks, which includes the Chem-Dry trademark and other trade names, trademarks, trade dress, service marks and other commercial symbols, or involves the franchise. "Social media" includes personal blogs, common social networks like Facebook, Instagram, and Pinterest, professional networks like LinkedIn, live-blogging tools like Twitter, virtual worlds, file, audio and video-sharing sites, and other similar social networking or media sites or tools. You must use only advertising, promotional and marketing materials that CDI has prepared or approved. CDI's approval of your separate website is conditioned on CDI's ownership of the URL for the separate website and your compliance with the Advertising Rules & Guidelines.
Source: Item 11 — Franchisor's Assistance, Advertising, Computer Systems, and Training (FDD pages 37–45)
What This Means (2024 FDD)
According to Chem-Dry's 2024 Franchise Disclosure Document, Chem-Dry, Inc. (CDI) is not required to conduct advertising for the Chem-Dry franchise system. The franchisee is responsible for all advertising and promotion of their Chem-Dry business. However, CDI reserves the right to establish a national advertising fund in the future. Currently, there is no advertising council composed of franchisees that advises Chem-Dry on advertising policies.
This means that as a Chem-Dry franchisee, you will have significant control over your local advertising efforts. However, you must use only advertising, promotional, and marketing materials that CDI has prepared or approved. Failure to comply with CDI's advertising guidelines can result in a fine of $2,000 per violation or termination of the Franchise Agreement.
During the initial phase after training, franchisees are expected to spend specific amounts on local advertising. Specifically, $1,000 per month is expected the month after completing New Buyer Training. Following this, for the next eight months (the "Initial Marketing Period"), a minimum of $2,000 per month must be spent on local marketing, with $1,000 of that amount dedicated to digital marketing. After the Initial Marketing Period, franchisees are expected to spend at least 15% of their Gross Revenue with a vendor of their choosing to advertise and market the Chem-Dry Business in their Franchised Area.
This level of required advertising expenditure is relatively common in franchising, as it ensures consistent brand visibility and supports local business growth. However, the specific allocation and approval requirements highlight the importance of understanding and adhering to Chem-Dry's marketing guidelines to avoid penalties and maintain brand consistency.