Is the Chem-Dry Certificate of Accommodation (COA) transferable?
Chem_Dry Franchise · 2024 FDDAnswer from 2024 FDD Document
ifferent designated franchised areas;
WHEREAS, the Chem-Dry franchise agreements ("Agreements") between Franchisee and CDI pertaining to the Franchises requires Franchisee to establish an office location within each franchised area and to operate the Franchises from each office location;
WHEREAS, Franchisee desires to establish only one office located in one of its franchised areas and to operate all of the Franchises from that single office location; and
WHEREAS, CDI is willing to grant an exception to the office location requirement in the Agreements, on a limited, non transferrable, and revocable basis.
NOW, THEREFORE, in consideration of the mutual promises made herein, CDI and Franchisee agree to be bound by the following terms and conditions
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- Unless this COA is signed in conjunction with the sale of a new Chem-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. Upon expiration of this COA and if CDI does not enter into a new COA with Franchisee, Franchisee will have until the expiration date of this COA to move all franchise operations to office locations within the designated franchised areas for each Franchise. Failure to do so within the timeframe will be a material breach of the Agreement for that Franchise. Franchisee acknowledges and agrees CDI has no obligation to enter into subsequent COAs with Franchisee and that doing so will be at CDI's sole discretion.
tered into by CDI solely as an accommodation to Franchisee and CDI may terminate this COA, with or without cause, upon sixty (60) days written notice to Franchisee. In the event this COA is terminated, Franchisee agrees to all franchise operations to office locations within the designated franchised areas for each Franchise with the timeframe indicated in CDI's notice.
Source: Item 23 — Receipts (FDD pages 68–264)
What This Means (2024 FDD)
According to Chem-Dry's 2024 Franchise Disclosure Document, the Consolidated Office Agreement (COA) is not transferable. The COA allows a franchisee with multiple Chem-Dry franchises to operate all of them from a single office location, which is an exception to the standard requirement of having an office in each franchised area. Chem-Dry offers this COA as an accommodation to the franchisee.
The document specifies that the COA is "non transferrable". This means that if a franchisee sells their Chem-Dry business, the new owner cannot assume the benefits of the COA. The COA expires with the franchise agreement and is non-renewable. However, a franchisee may be eligible to enter into a second COA with Chem-Dry, provided they notify Chem-Dry of their desire to do so at least 60 days prior to the expiration of the current COA. Any subsequent COAs will be upon then-current terms and conditions and will require payment of the then-current fee.
Chem-Dry also retains the right to terminate the COA at any time, with or without cause, by giving the franchisee 60 days' written notice. If the COA is terminated or expires and Chem-Dry does not enter into a new COA with the franchisee, the franchisee must move all franchise operations to office locations within the designated franchised areas for each franchise by the expiration date of the COA. Failure to do so constitutes a material breach of the franchise agreement. Chem-Dry has no obligation to enter into subsequent COAs with the franchisee, and doing so is at Chem-Dry's sole discretion.
If the franchise agreement for the location where the franchisee's office is located terminates or expires, the franchisee must immediately move the office to another location approved by Chem-Dry. The franchisee must also pay Chem-Dry a nonrefundable administration fee of $500.00 for the privilege of headquartering all franchises from a single office location, unless the COA is signed in conjunction with the sale of a new Chem-Dry franchise.