What is the condition for a Chem-Dry franchisee to be eligible to enter into a second COA?
Chem_Dry Franchise · 2024 FDDAnswer from 2024 FDD Document
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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. 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, a franchisee may be eligible to enter into a second Consolidated Office Agreement (COA) if they notify Chem-Dry of their desire to do so at least sixty (60) days prior to the expiration of their current COA. However, any subsequent COA will be subject to the terms and conditions then in effect and will require payment of the then-current fee.
This means that while a franchisee has the option to request another COA, Chem-Dry is not obligated to grant it. The decision to enter into a subsequent COA is at Chem-Dry's sole 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.
This clause protects Chem-Dry by ensuring franchisees comply with the standard requirement of operating from individual locations if a COA is not in place. It also allows Chem-Dry to update the terms and fees for COAs as they see fit, which is a standard practice in franchising to adapt to changing market conditions and business strategies.