Do all Chem Dry franchisees contribute to the Brand Marketing Fund (BMF)?
Chem_Dry Franchise · 2024 FDDAnswer from 2024 FDD Document
a third party may provide the necessary services.
Brand Marketing Fund
The Franchise Agreement includes a required monthly contribution to the Brand Marketing Fund ("BMF") of between $160 and $300 for each franchise ("BMF Contribution"). The current BMF Contribution amount is $160 and can be increased with 30 days' written notice from CDI once annually. All other franchisees and any company owned locations operated by CDI or an affiliate of CDI will contribute at the same rate to the BMF. Some franchisees with older forms of Franchise Agreement do not contribute to the BMF. In 2023, BMF Contributions were spent as fol
Source: Item 11 — Franchisor's Assistance, Advertising, Computer Systems, and Training (FDD pages 37–45)
What This Means (2024 FDD)
According to Chem Dry's 2024 Franchise Disclosure Document, most franchisees are required to contribute to the Brand Marketing Fund (BMF), but there are exceptions. The standard Franchise Agreement mandates a monthly BMF contribution ranging from $160 to $300 per franchise. Currently, the contribution is set at $160, and Chem Dry can increase this amount once annually with 30 days' written notice. All franchisees and company-owned locations contribute at the same rate. However, some franchisees with older agreements are exempt from these contributions.
The BMF is used for various marketing and advertising activities. In 2023, the allocation of BMF contributions was as follows: 8% on production, 90% on media placement, and 2% on administrative expenses. Chem Dry manages the BMF and decides how the funds are spent, aiming to benefit the entire Chem Dry system. A committee composed of six franchisees and two Chem Dry corporate staff members advises Chem Dry on the BMF's operation.
Chem Dry does not guarantee that any franchisee will receive a benefit directly proportional to their contribution. While Chem Dry will provide unaudited financial statements and reports related to the BMF, the company can also suspend, terminate, or reinstate the BMF at any time, provided that all funds are spent for their intended purposes. This means that while most franchisees contribute to the BMF, the benefits derived from it may vary, and the program's continuation is at the discretion of Chem Dry.