Can Chem Dry conduct promotional programs involving the provision of services to customers inside a Chem Dry franchisee's area?
Chem_Dry Franchise · 2024 FDDAnswer from 2024 FDD Document
Except for the limited license and rights expressly granted to FRANCHISEE under this Agreement, CDI retains all rights with respect to CHEM-DRY Businesses, the Franchise System, the Marks, the sale of the same or similar products and services, and any other activities CDI deems appropriate whenever and wherever CDI desires including inside or outside the Franchised Area. Specifically, but without limitation, CDI reserves the right to:
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- subject to the foregoing limitations on the Maximum Number of franchises in the Franchised Area, grant franchises for any area, including inside or outside the Franchised Area, on any terms CDI deems appropriate;
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- develop, sell, manufacture or distribute, inside or outside the Franchised Area, whether in proximity to the BUSINESS or otherwise, any type of product or service identified by or associated with the Marks or other trademarks in any channel of distribution, including but not limited to telephone and mail order, television, electronic
media (i.e., including the internet), catalogue sales, and/or through retail or similar establishments or outlets;
Source: Item 23 — Receipts (FDD pages 68–264)
What This Means (2024 FDD)
According to Chem-Dry's 2024 Franchise Disclosure Document, Chem-Dry retains significant rights regarding the Chem-Dry business, the franchise system, and the sale of similar services, including within a franchisee's territory. Specifically, Chem-Dry reserves the right to market and sell its services inside or outside the Franchised Area.
This means that Chem-Dry can engage in activities such as developing, selling, or distributing products and services associated with its trademarks through various channels, including the internet or retail establishments, regardless of their proximity to a franchisee's business. This also includes the right to grant franchises for any area, including inside a franchisee's area.
For a prospective franchisee, this indicates that Chem-Dry retains considerable control over marketing and service offerings, even within the franchisee's designated area. While franchisees are expected to promote and develop their business within their territory, Chem-Dry's reserved rights could lead to competition from other channels or even other franchisees. Therefore, it is important for a prospective franchisee to understand the potential impact of these reserved rights on their business and to discuss any concerns with Chem-Dry.