Is the Chem-Dry COA granted as a right, or as an accommodation?
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 t
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 granted as an accommodation, not as a right. Chem-Dry is willing to grant an exception to the standard office location requirement in the franchise agreements, but this is done on a "limited, non transferrable, and revocable basis." This means that while a franchisee might desire to operate multiple Chem-Dry franchises from a single office location instead of having an office in each designated franchised area, Chem-Dry provides this option as a privilege, not an entitlement.
Several conditions are attached to this accommodation. First, unless the COA is signed with a new Chem-Dry franchise, the franchisee must pay a nonrefundable administration fee of $500 for the privilege of centralizing the franchises. The COA expires with the franchise agreement and is non-renewable and non-transferable, meaning it cannot be passed on if the franchise is sold. The franchisee must maintain accurate books for each franchise at the single office location.
Chem-Dry also retains the right to terminate the COA with or without cause, providing sixty days' written notice. If the COA is terminated, the franchisee must move all franchise operations to separate office locations within the designated franchised areas within the timeframe specified in Chem-Dry's notice. Furthermore, if the franchise agreement for the location where the consolidated office is situated terminates or expires, the franchisee must immediately move the office to another approved location. Chem-Dry has no obligation to enter into subsequent COAs with the franchisee, and doing so is at Chem-Dry's sole discretion. These terms emphasize that the COA is a conditional and revocable exception to Chem-Dry's standard requirements.