Does Chem-Dry have an obligation to enter into subsequent COAs with a franchisee?
Chem_Dry Franchise · 2024 FDDAnswer from 2024 FDD Document
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.
Source: Item 23 — Receipts (FDD pages 68–264)
What This Means (2024 FDD)
According to Chem-Dry's 2024 Franchise Disclosure Document, Chem-Dry franchisees who operate multiple franchises in different territories may want to operate them from a single, consolidated office. To do so, they must enter into a Consolidated Office Agreement (COA) with Chem-Dry.
However, Chem-Dry is under no obligation to enter into subsequent COAs with a franchisee. The FDD states that upon the expiration of a COA, 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 sixty (60) days prior to the expiration of the current COA. Any subsequent COAs will be subject to the then-current terms and conditions and will require payment of the then-current fee.
The decision to enter into a new COA rests solely at Chem-Dry's discretion. If Chem-Dry chooses not to enter into a new COA, the franchisee must move all franchise operations to office locations within the designated franchised areas for each franchise by the expiration date of the current COA. Failure to do so constitutes a material breach of the Franchise Agreement.