What factors does Chem Dry consider when determining the franchised area?
Chem_Dry Franchise · 2024 FDDAnswer from 2024 FDD Document
fied by successful completion of an additional training and/or the purchase of additional equipment and cleaning solutions. Termination or expiration of this Agreement shall constitute a termination or expiration of the Franchise.
D. FRANCHISED AREA
The number of franchises which can operate and perform CHEM-DRY Businesses within the Franchised Area at any given time is determined by dividing the current population of the area by
sixty thousand (60,000). The nearest whole number to the quotient (the "Maximum Number") is the maximum number of franchises that CDI may grant in the Franchised Area; provided, however, that, in addition, another franchisee or a third party designated by CDI may service national accounts in the Franchised Area if FRANCHISEE elects not to service a national account or if a national account elects not to do business with FRANCHISEE. The Franchised Area will be determined by CDI based on, among other things, population, population density, geographical terrain and market potential. Based on population changes, the Maximum Number may increase or decrease from time to time and may not remain constant; however, the Maximum Number only affects CDI's ability to grant franchises and no franchise will be terminated solely as a result of a decrease in the Maximum Number. FRANCHISEE is in compliance with this Agreement when no event or circumstance has occurred that will give CDI the right to terminate this Agreement under Section 15, whether or not CDI has given notice of default, non-compliance or termination to FRANCHISEE.
FRANCHISEE agrees to operate and conduct business from a single location within the nonexclusive Franchised Area from which FRANCHISEE may operate as many crews, teams, sales forces and vans as necessary. In the event FRANCHISEE has multiple franchises, a separate cleaning crew must be available for each franchise to perform requested work within the Franchised Area for the Approved Services.
FRANCHISEE agrees to advertise and solicit business for the authorized services within the Franchised Area only. FRANCHISEE further agrees that FRANCHISEE will accept and perform only those jobs that are wi
Source: Item 23 — Receipts (FDD pages 68–264)
What This Means (2024 FDD)
According to Chem Dry's 2024 Franchise Disclosure Document, the franchised area is determined by Chem Dry based on several factors, including population, population density, geographical terrain, and market potential. The number of Chem Dry franchises that can operate within a franchised area at any given time is calculated by dividing the current population of the area by 60,000. The nearest whole number to this quotient represents the maximum number of franchises Chem Dry may grant in that area.
However, Chem Dry retains the right to allow another franchisee or a third party to service national accounts within the franchised area if the franchisee chooses not to service a national account or if the national account prefers not to work with the franchisee. This means that even within a franchisee's designated area, Chem Dry can authorize other entities to provide services to national accounts, potentially impacting the franchisee's business. The maximum number of franchises allowed in an area may change over time due to population fluctuations, but a decrease in the maximum number will not result in the termination of any existing Chem Dry franchise agreements.
Chem Dry franchisees must operate from a single location within their assigned territory but can deploy as many crews and vans as needed. Franchisees are obligated to focus their advertising and business solicitation efforts within their franchised area and are expected to only accept and perform jobs within that area. If a Chem Dry franchisee performs a job outside their designated area, Chem Dry has the right to impose a fine of $5,000 for each occurrence or even terminate the franchise agreement. This underscores the importance of adhering to the geographical boundaries of the franchised area to avoid penalties and maintain compliance with the franchise agreement.