What conditions must a Chem Dry franchisee meet to be approved for a Franchised Area Transfer?
Chem_Dry Franchise · 2024 FDDAnswer from 2024 FDD Document
G. FRANCHISED AREA TRANSFER
If FRANCHISEE (and its Owners) are in compliance with this Agreement and any other agreement with CDI, then, subject to the other provisions of this Section 13, CDI shall not unreasonably withhold its approval of FRANCHISEE'S request to relocate the BUSINESS to a different franchised area so long as FRANCHISEE meets all of the applicable requirements of Section 13.H. ("Franchised Area Transfer"). FRANCHISEE acknowledges and agrees CDI's approval of the Franchised Area Transfer is limited to determining if FRANCHISEE meets the requirements of Section 13.H. and is not an endorsement by CDI of FRANCHISEE'S decision to relocate the Business or an indicator of FRANCHISEE'S future performance in the new franchised area. In no event is CDI liable for any damages suffered by FRANCHISEE (or its owners) as a result of approving the Franchised Area Transfer.
H. CONDITIONS ON APPROVAL OF FRANCHISED AREA TRANSFER
For any proposed Franchised Area Transfer, all of the following conditions must be met before or concurrently with the effective date of the Franchised Area Transfer:
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- the FRANCHISEE must be in compliance with this Agreement and any other agreement with CDI and its affiliates
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- FRANCHISEE has paid all amounts then due and owed to CDI under this Agreement and the Business Note, and has submitted all required reports and statements;
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- this Agreement is no more than six (6) months from the expiration of its term;
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- FRANCHISEE must sign CDI's then current form of franchise agreement and related documents, any and all of the provisions of which may differ materially from any and all of those contained in this Agreement;
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- FRANCHISEE must not have any unresolved customer service issues;
Source: Item 23 — Receipts (FDD pages 68–264)
What This Means (2024 FDD)
According to Chem Dry's 2024 Franchise Disclosure Document, a franchisee seeking to relocate their business to a different franchised area must meet specific conditions to gain approval for a Franchised Area Transfer. Chem Dry states that approval is contingent upon the franchisee meeting the requirements outlined in Section 13.H of the agreement. However, Chem Dry clarifies that its approval is limited to verifying that the franchisee meets these requirements and does not constitute an endorsement of the relocation decision or a guarantee of future performance in the new area. Chem Dry is not liable for any damages the franchisee may incur as a result of the approved transfer.
Specifically, the franchisee must be in compliance with the Franchise Agreement and any other agreements with CDI and its affiliates. All due and owed amounts to CDI under the Agreement and the Business Note must be paid, and all required reports and statements must be submitted. The Franchise Agreement should also be no more than six months from its expiration. The franchisee is required to sign Chem Dry's then-current form of franchise agreement and related documents, which may contain provisions that differ materially from the existing agreement. Additionally, the franchisee must resolve any outstanding customer service issues.
These conditions ensure that franchisees seeking a transfer are in good standing with Chem Dry, financially stable, and prepared to adhere to the current standards and agreements. This protects Chem Dry's brand and ensures a smooth transition to the new franchised area. Franchisees should carefully review these conditions and ensure they meet all requirements before pursuing a Franchised Area Transfer.