What is the condition of the Chem-Dry COA regarding renewability?
Chem_Dry Franchise · 2024 FDDAnswer from 2024 FDD Document
nts, 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.
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 explicitly non-renewable and non-transferable. This agreement allows a franchisee to operate multiple Chem-Dry franchises from a single office location, which is an exception to the standard requirement of having an office in each franchised area.
However, the Chem-Dry 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 before the expiration of the current COA. Any subsequent COAs will be subject to the terms and conditions then in effect and will require payment of the then-current fee.
Chem-Dry has no obligation to enter into subsequent COAs with the franchisee, and doing so is at Chem-Dry's sole discretion. If a new COA is not agreed upon, 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 comply will be considered a material breach of the franchise agreement.