Is a Chem-Dry franchisee allowed to sell customer lists?
Chem_Dry Franchise · 2024 FDDAnswer from 2024 FDD Document
You must not sell the customer list(s) or customer contracts, or otherwise use the customer list(s) for any purpose other than in connection with the operation of your Chem-Dry Business.
FRANCHISEE agrees not to sell, rent or lease the Customer List(s) or customer contracts, or otherwise use the Customer List(s) for any purpose other than in connection with the operation of the BUSINESS.
FRANCHISEE also agrees to provide CDI with access to the Customer List. The Customer List must contain the customer's first and last name, address with city, state and postal code, the telephone number with area code, email address and last date of service and other information required by CDI. FRANCHISEE acknowledges that the Customer List and contracts are derived from and are the result of the operation of the CHEM-DRY Business franchise. Therefore, FRANCHISEE agrees that the Customer List and contracts may not be used in connection with any business other than the BUSINESS, and may not be used by, or sold or otherwise transferred to, a third party except as otherwise specifically provided in this Agreement.
Source: Item 16 — RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL (FDD page 51)
What This Means (2024 FDD)
According to Chem-Dry's 2024 Franchise Disclosure Document, franchisees are generally prohibited from selling or transferring customer lists. Chem-Dry emphasizes that the reputation and goodwill of the brand are maintained by providing high-quality services.
The FDD states that franchisees must not sell, rent, or lease their customer lists or customer contracts. They are also restricted from using the customer lists for purposes outside the operation of their Chem-Dry business. This restriction is in place to protect the confidential information and customer relationships that are considered integral to the Chem-Dry franchise system.
Upon termination or expiration of the franchise agreement, the franchisee must provide Chem-Dry with access to the Customer List, which includes customer names, addresses, phone numbers, email addresses, and last service dates. This information is to be used only in connection with the Chem-Dry business and cannot be sold or transferred to a third party, reinforcing the franchisor's control over customer data and relationships.
These restrictions ensure that customer data remains within the Chem-Dry system, preventing franchisees from profiting by selling customer information or using it for other business ventures, especially after the franchise agreement ends. This policy is typical in franchising, as customer relationships often contribute significantly to a brand's value.