If I am a Chem Dry franchisee in Maryland, can I request an accounting of the advertising fund?

According to Chem Dry's 2024 Franchise Disclosure Document, franchisees contribute to a Brand Marketing Fund (BMF). While the BMF itself is not audited, Chem Dry prepares an unaudited financial statement and a summary of expenditures, known as the Annual Report. As a Chem Dry franchisee in Maryland, you can request this Annual Report in writing for the most recently ended fiscal year. Chem Dry will provide this report to you as Confidential Information.

It's important to note that Chem Dry is not obligated to spend BMF amounts in a way that provides a specific benefit equivalent or proportionate to your contribution. Chem Dry also does not guarantee that you will receive or derive any benefit from BMF activities. However, Chem Dry will make final reports of studies and reports produced by the BMF available to you at no cost as Confidential Information, and will also make all materials produced by the BMF for franchisee use in the Business available to you.

The BMF is administered by CDI with the assistance of a Chem-Dry Brand Marketing Fund Committee, which includes both franchisees and CDI corporate staff. This committee helps direct the activities and programs funded by the BMF. Chem Dry retains the right to suspend, terminate, or reinstate the BMF at any time, but will not terminate it until all amounts in the fund have been spent for the intended purposes.

This arrangement is fairly typical in franchising, where advertising funds are common but full audits are not always provided. Franchisees generally have the right to see how the funds are being spent, but the franchisor retains control over the fund's management and strategy. As a prospective Chem Dry franchisee, understanding the scope and limitations of the Annual Report is crucial for making an informed investment decision.