If Chem Dry agrees to finance the Initial License Fee, what is the Chem Dry franchisee required to do?
Chem_Dry Franchise · 2024 FDDAnswer from 2024 FDD Document
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- If CDI agrees to finance the Initial License Fee, FRANCHISEE shall pay a down payment in the amount as set forth on the Summary Page when FRANCHISEE signs this Agreement and FRANCHISEE will sign and deliver to CDI FRANCHISEE'S Business Note (the "Business Note") for the balance of the Initial License Fee. The Business Note is payable whether or not this Agreement terminates and is not subject to any claim, set off or defenses arising under this Agreement. CDI may assign, pledge or transfer the Business Note to a third party without notice to FRANCHISEE.
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- Upon execution of this Agreement by CDI, the Initial License Fee shall be deemed fully earned and non-refundable.
Source: Item 23 — Receipts (FDD pages 68–264)
What This Means (2024 FDD)
According to Chem Dry's 2024 Franchise Disclosure Document, if Chem Dry agrees to finance the Initial License Fee, the franchisee must make a down payment. The amount of the down payment is detailed on the Summary Page of the Franchise Agreement.
Additionally, the Chem Dry franchisee is required to sign and deliver a Business Note to Chem Dry for the remaining balance of the Initial License Fee. This Business Note is payable regardless of whether the Franchise Agreement is terminated and is not subject to any claims, offsets, or defenses arising from the agreement. Chem Dry retains the right to assign, pledge, or transfer the Business Note to a third party without providing notice to the franchisee.
The FDD states that upon execution of the Franchise Agreement by Chem Dry, the Initial License Fee is considered fully earned and is non-refundable. Therefore, the franchisee is obligated to fulfill the terms of the Business Note, even if the franchise does not become operational or is terminated early.