What is the effect of the Equipment Sales and Security Agreement on the Chem Dry Equipment Purchase Schedule?
Chem_Dry Franchise · 2024 FDDAnswer from 2024 FDD Document
Subject to Agreement. This Schedule is issued under and is subject to the Equipment Sales and Security Agreement to which it relates in all respects. In the event the Equipment purchased pursuant to this Schedule is not proprietary to CDI nor bears any insignia or color schemes associated with the Chem-Dry® brand, the requirements of paragraph 6 of the Equipment Sales and Security Agreement shall be waived for the Equipment.
Source: Item 23 — Receipts (FDD pages 68–264)
What This Means (2024 FDD)
According to Chem Dry's 2024 Franchise Disclosure Document, the Equipment Sales and Security Agreement governs the Equipment Purchase Schedule. The schedule is issued under and subject to the Equipment Sales and Security Agreement in all respects. This means that the terms and conditions outlined in the Equipment Sales and Security Agreement dictate how the equipment is purchased, secured, and potentially repurchased by Chem Dry.
The Equipment Sales and Security Agreement outlines the franchisee's obligations regarding the equipment, including maintaining it properly, insuring it, and keeping it free from liens. It also specifies that the equipment can only be used with Chem-Dry authorized cleaning solutions and within the Chem-Dry system. Any deviation from these requirements can be considered a breach of the Franchise Agreement and the Equipment Sales and Security Agreement, potentially leading to Chem Dry repurchasing the equipment for a nominal fee of $10.00.
Furthermore, if Chem Dry finances any portion of the equipment purchase, the franchisee grants Chem Dry a security interest in the equipment. This allows Chem Dry to protect its investment and ensures that the franchisee fulfills their payment obligations. Upon termination or expiration of the Franchise Agreement, the franchisee must cooperate with Chem Dry to arrange for the shipment of the equipment to a location designated by Chem Dry, with Chem Dry covering the freight costs, unless the franchisee sells the equipment to another Chem Dry franchisee with Chem Dry's consent.