What is the condition for a Chem-Dry franchisee to sell the equipment to another Chem-Dry Franchisee?
Chem_Dry Franchise · 2024 FDDAnswer from 2024 FDD Document
Sell the Equipment to another Chem-Dry Franchisee in good standing under its franchise agreement at a mutually acceptable price. CDI has first right of refusal to purchase the Equipment and must approve any transaction. If CDI financed any portion of the purchase price of the Equipment, the transferee will pay the proceeds to CDI if there is any outstanding balance under the Schedule for the Equipment prior to transfer of the Equipment. At the time of transfer Franchisee's account with CDI must be current and the purchasing Franchisee may not have any pending default under any agreement with the proposed transferee.
Source: Item 23 — Receipts (FDD pages 68–264)
What This Means (2024 FDD)
According to Chem-Dry's 2024 Franchise Disclosure Document, a Chem-Dry franchisee can sell their equipment to another Chem-Dry franchisee under specific conditions. The selling franchisee must be in good standing under their franchise agreement. The price of the equipment must be mutually acceptable to both parties involved in the transaction. Chem-Dry, Inc. (CDI) retains the first right of refusal to purchase the equipment themselves and must approve the transaction between the two franchisees.
If CDI financed any portion of the equipment's original purchase price, the purchasing franchisee is obligated to pay the proceeds to CDI to cover any outstanding balance before the equipment transfer can occur. Additionally, at the time of the transfer, the selling franchisee's account with CDI must be current, and the purchasing franchisee cannot have any pending defaults under any agreement with the selling franchisee.
These conditions ensure that Chem-Dry maintains control over its proprietary equipment and protects its financial interests. By requiring CDI's approval and the satisfaction of outstanding financial obligations, Chem-Dry aims to ensure a smooth and compliant transfer process within its franchise network. This also helps maintain the integrity of the Chem-Dry brand and standards.