Is a Chem-Dry franchisee obligated to participate personally in the direct operation of their 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, franchisees are not required to participate personally in the direct operation of their Chem-Dry business. However, Chem-Dry recommends that franchisees do so. The franchisee is ultimately responsible for the Chem-Dry business's successful operation and is directly responsible to Chem-Dry under the Franchise Agreement, regardless of their participation in day-to-day operations.
If a Chem-Dry franchisee chooses to employ an operator to manage the business, they must disclose the operator to Chem-Dry. The operator is obligated to complete Chem-Dry's Initial Training/New Buyer Training and other training programs successfully within 90 days of starting employment. The franchisee must still complete New Buyer Training within 90 days after signing the Franchise Agreement.
The operator is not required to have any ownership interest in the Chem-Dry business. The franchisee must ensure the operator signs an agreement not to disclose any trade secrets, confidential, or proprietary information, including the contents of the Manual, or engage in any competitive business. The franchisee is responsible for paying for any additional training that Chem-Dry requires for an employee deemed unqualified because they cannot complete training successfully. Chem-Dry franchisees are not permitted to use independent contractors to provide services to customers and cannot subfranchise, sublicense, or delegate their franchise rights.
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 and agree to be bound personally by every contractual provision, including the covenant not to compete. This guarantee is detailed in Exhibit B of the Franchise Agreement.