For Chem Dry, how are the costs of maintenance and repairs to property and equipment handled?
Chem_Dry Franchise · 2024 FDDAnswer from 2024 FDD Document
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RETURN OF EQUIPMENT. Upon expiration or termination of the Franchise Agreement, Franchisee will cooperate with CDI to allow CDI to arrange for shipment of the Equipment to a location designated by CDI, with CDI paying the cost of freight for such shipment,
unless Franchisee has arranged for the sale of the Equipment to another Chem Dry franchisee with the consent of CDI.
COVENANTS OF FRANCHISEE. Franchisee covenants with CDI to (i) use and maintain the Equipment in a lawful manner and so as not to violate any law or regulation of the state, city or other political subdivisions in which Franchisee uses the Equipment; (ii) return, pay and file when due all taxes, fees and similar charges, including without limitation sales or use tax, and ad valorem and personal property taxes, imposed on the ownership, possession or use of the Equipment; (iii) keep the Equipment free and clear of all liens, security interests, claims and encumbrances except for those incurred through the initial financing of the Equipment from a vendor approved by CDI; (iv) obtain and maintain property insurance on the Equipment covering loss, damage, theft, vandalism and casualty; (v) maintain the Equipment per the manufacturer's maintenance, repair and replacement instructions; (vi) maintain in place any notices, labels or other indicia provided by CDI to indicate that the Equipment is subject to this Agreement; (vii) operate the Business as required under the Franchise Agreement; and (viii) notify CDI when any party claims any interest in the Equipment.
GRANT OF SECURITY INTEREST. In the event Franchisee's purchase of the Equipment sold under the Schedule is financed by CDI, Franchisee hereby grants to CDI a continuing security interest in the Equipment sold to Franchisee, and any additions, accessions, accessories, attachments and replacements of such Equipment, any proceeds and products.
Source: Item 23 — Receipts (FDD pages 68–264)
What This Means (2024 FDD)
According to the 2024 Chem Dry Franchise Disclosure Document, franchisees are responsible for the maintenance and repair of their property and equipment. Specifically, the franchisee must maintain the equipment per the manufacturer's maintenance, repair, and replacement instructions. This includes keeping the equipment free of liens and maintaining property insurance.
Chem Dry franchisees must also cover all expenses related to developing and operating the business. This includes securing financing, obtaining permits and licenses, and purchasing or leasing all required equipment, supplies, products, and vehicles. The franchisee is responsible for maintaining these assets in good condition.
Chem Dry does provide initial training that includes instruction on how to use and maintain the equipment. However, the ongoing costs of maintaining and repairing the equipment, including vehicles, are the responsibility of the franchisee. This is a standard arrangement in many franchise systems, where the franchisee bears the cost of upkeep for the assets they use to operate the business.