Does the Chem Dry franchise agreement create a partnership between CDI and the franchisee?
Chem_Dry Franchise · 2024 FDDAnswer from 2024 FDD Document
FRANCHISEE acknowledges that FRANCHISEE has read this Agreement and CDI's Franchise Disclosure Document and that FRANCHISEE understands and accepts the terms, conditions and covenants contained in this Agreement as being reasonably necessary to maintain CDI's high standards of quality and service, as well as the uniformity of those standards at each CHEM-DRY Business and to protect and preserve the goodwill of the Marks.
FRANCHISEE acknowledges that CDI has the right to restrict FRANCHISEE'S sources of goods and services, as provided in various sections in this Agreement.
FRANCHISEE acknowledges that FRANCHISEE has conducted an independent investigation of the business contemplated by this Agreement and recognizes that it involves business risks and that the success of the venture is largely dependent upon the business abilities of FRANCHISEE.
FRANCHISEE acknowledges and agrees that CDI's officers, directors, employees and agents act only in a representative and not in a personal capacity in their dealings with FRANCHISEE.
FRANCHISEE further acknowledges that FRANCHISEE has not received or relied upon, any warranty or guaranty, express or implied, as to the potential revenues, profits or success of the franchise or policies made by CDI or its officers, directors, employees or agents that are contrary to the statements, if any, expressly made in CDI's Franchise Disclosure Document.
FRANCHISEE further represents to CDI, as an inducement to its entry into this Agreement, that FRANCHISEE has made no misrepresentations in obtaining the franchise.
FRANCHISEE further acknowledges that CDI has not made any representation, warranty, or other claim regarding the CHEM-DRY Business franchise opportunity, other than those made in this Agreement and CDI's Franchise Disclosure Document.
FRANCHISEE represent and warrants to CDI that FRANCHISEE has independently and
Source: Item 23 — Receipts (FDD pages 68–264)
What This Means (2024 FDD)
According to Chem Dry's 2024 Franchise Disclosure Document, the franchise agreement does not create a partnership between CDI and the franchisee. The agreement explicitly grants the franchisee a non-exclusive franchise to operate a Chem-Dry business using Chem Dry's trademarks and system. This arrangement is a licensing agreement, not a partnership.
The document emphasizes the franchisee's independent investigation and acknowledgment of business risks, further reinforcing the absence of a partnership. The franchisee recognizes that the success of the venture depends largely on their own business abilities. Chem Dry's officers, directors, employees, and agents act only in a representative capacity, not a personal one, in their dealings with the franchisee.
Furthermore, the franchisee acknowledges that Chem Dry has not provided any warranties or guarantees regarding potential revenues, profits, or the success of the franchise beyond what is stated in the Franchise Disclosure Document. The franchisee also warrants that they have independently evaluated the opportunity with their own advisors and have relied solely on those evaluations. These acknowledgments and representations underscore the independent nature of the franchise relationship, distinguishing it from a partnership where both parties share in the risks and rewards more directly.