What is the dependency for Chem-Dry to grant an additional franchise to a franchisee?
Chem_Dry Franchise · 2024 FDDAnswer from 2024 FDD Document
ntered into one or more Franchise Agreements, whereby Franchisee was granted the right to own and operate an Chem-Dry business within a specific franchised area;
WHEREAS, Franchisee desires to acquire an additional franchise; and
WHEREAS, CDI is willing to grant an additional franchise to Franchisee provided Franchisee executes this Agreement concurrently with the execution of a new franchise agreement and pays the required fee to CDI.
NOW, THEREFORE, in consideration of the covenants contained herein and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto agree as follows:
- Release. The Franchisee hereby forever releases, remises and discharges CDI and CDI's affiliates, its shareholders, directors, officers, employees and agents, and all its respective heirs, executors, administrators, successors and assigns, of and from any and all known and unknown claims, causes of action, suits, debts, agreements, promises and demands of whatever nature or kind, in law or in equity, which the Franchisee now has, ever had, or, but for this release, hereafter would or could have arising from the relationship between the parties or relating in any manner to the Franchise Agreements, except for CDI's obligation under the franchise agreement on and after the date of this Agreement. Franchisee hereby warrants and
Source: Item 22 — CONTRACTS (FDD page 68)
What This Means (2024 FDD)
According to Chem-Dry's 2024 Franchise Disclosure Document, Chem-Dry is willing to grant an additional franchise to an existing franchisee if the franchisee executes a release agreement concurrently with the execution of a new franchise agreement and pays the required fee to Chem-Dry. This is according to Exhibit F, titled "Release Agreement For Franchisees Acquiring an Additional Franchise."
This agreement stipulates that the franchisee releases Chem-Dry from all known and unknown claims, except for Chem-Dry's obligations under the new franchise agreement. This release covers any issues arising from the previous franchise agreements between the franchisee and Chem-Dry. The franchisee also confirms that they have not assigned any of the claims being released.
In essence, before Chem-Dry will award a franchisee another franchise location, the franchisee must sign a release that absolves Chem-Dry of any liability related to prior franchise agreements, and the franchisee must pay the required fee. This is a common practice in franchising, as it protects the franchisor from potential legal issues stemming from past dealings with the franchisee.