As a Chem Dry franchisee, what are the franchisee's responsibilities regarding financing for developing and operating the business?
Chem_Dry Franchise · 2024 FDDAnswer from 2024 FDD Document
FRANCHISEE agrees to do the following, at FRANCHISEE's own expense, to develop the BUSINESS:
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- secure all financing required to develop and operate the BUSINESS;
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- obtain and maintain in good standing all required permits and licenses necessary to operate the BUSINESS, and comply with all applicable laws relating to the operation of the BUSINESS;
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- purchase or lease, and install, all required equipment, supplies, products, vehicles (including at least one (1) white cargo van) and signs (collectively, "Operating Assets") for the BUSINESS; and
Source: Item 23 — Receipts (FDD pages 68–264)
What This Means (2024 FDD)
According to Chem Dry's 2024 Franchise Disclosure Document, the franchisee is responsible for securing all financing required to develop and operate their Chem Dry business. This includes, but is not limited to, obtaining and maintaining all necessary permits and licenses, purchasing or leasing all required equipment, supplies, products, vehicles (specifically at least one white cargo van), and signage.
This means a prospective Chem Dry franchisee needs to have a solid financial plan in place. They will need to secure funding for the initial investment, which covers the franchise fee, initial package (advertising, cleaning solutions, and equipment), and ongoing operational costs. The franchisee must also budget for expenses such as permits, licenses, vehicle costs, and training-related expenses (compensation, benefits, taxes, insurance, travel, and living expenses). The initial package includes training tuition for two people, but additional trainees incur a tuition fee of $75.00 per day per attendee.
Chem Dry may offer financing for the initial license fee, in which case the franchisee will sign a Business Note for the balance. However, this Business Note is payable regardless of whether the agreement terminates and is not subject to any claims or defenses. Chem Dry also retains the right to assign or transfer the Business Note to a third party without notifying the franchisee. This highlights the importance of carefully reviewing the terms of any financing offered by Chem Dry and understanding the obligations associated with the Business Note.
Overall, the financial responsibility rests heavily on the franchisee. They must be prepared to cover all costs associated with starting and running the Chem Dry business, from securing initial funding to managing ongoing expenses. Prospective franchisees should conduct thorough financial planning and seek professional advice to ensure they have the resources necessary to succeed.