How does Chem Dry communicate its standards and specifications to franchisees regarding approved suppliers?
Chem_Dry Franchise · 2024 FDDAnswer from 2024 FDD Document
ry Business.
Approval of other suppliers
CDI may approve other suppliers of equipment, products, supply items or business services who meet CDI's specifications. CDI issues and modifies standards and specifications to franchisees by including them in the Manual (and revisions to the Manual) or otherwise in writing. If you propose to purchase or lease any equipment, product, supply item or business service from another supplier and/or utilize any equipment, product, supply item or business service from another supplier which is not then approved by CDI, you will first notify CDI and, upon request, furnish to CDI specifications, photographs, drawings and/or other information or items sufficient to afford CDI a reasonable opportunity to determine whether such equipment, product or supply item or supplier complies with our specifications and standards. We evaluate a supplier on the reliability of its product and service, product support, price and responsiveness. We do not charge you a fee to approve a product or a supplier and we typically will notify you of our approval or disapproval within 30 days. We do not issue our specifications or standards for evaluating and approving suppliers. You may only use equipment or product or supply items which have been approved by us in writing. If you use any cleaning process or equipment not approved by CDI (which includes improper mixing or application of authorized products), CDI will have the right to impose on you a fine of up to $5,000 per
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 31–33)
What This Means (2024 FDD)
According to Chem Dry's 2024 Franchise Disclosure Document, Chem Dry communicates its standards and specifications for approved suppliers to franchisees through the franchise operations manual and written communications. These standards and specifications are subject to change. If a franchisee wants to use a different supplier, they must notify Chem Dry and provide all necessary information (specifications, photos, drawings, etc.) to allow Chem Dry to evaluate the proposed supplier's compliance with Chem Dry's standards.
Chem Dry evaluates potential suppliers based on the reliability of their products and services, product support, price, and responsiveness. Chem Dry does not charge a fee for this approval process and typically informs the franchisee of their decision within 30 days. Franchisees are only allowed to use equipment, products, and supplies that have been approved by Chem Dry in writing.
Failure to adhere to Chem Dry's approved suppliers and standards can result in significant penalties. Specifically, using any unapproved cleaning process or equipment, including improper mixing or application of authorized products, can lead to a fine of up to $5,000 per violation or even termination of the Franchise Agreement. This underscores the importance of franchisees strictly adhering to Chem Dry's guidelines to avoid potential financial repercussions and maintain their franchise agreement.
Chem Dry requires franchisees to purchase the Initial Package from them, and to purchase all cleaning solutions from Chem Dry at the then current list price, plus applicable taxes. Franchisees are required to purchase a minimum of $3,244.50 of cleaning solution per franchise from CDI each calendar year, with this amount increasing annually based on the Consumer Price Index. Chem Dry may approve only a limited number of sources or a single source for certain equipment, supply items, promotional materials and business services.