Is the Chem Dry Initial Fee refundable?
Chem_Dry Franchise · 2024 FDDAnswer from 2024 FDD Document
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- FRANCHISEE agrees to pay a non-recurring and non-refundable initial fee (the "Initial Fee") comprised of the following:
- a. An initial license fee in the amount as set for on the Summary Page of this Agreement for the right to use the Marks during the term of this Agreement (the "Initial License Fee"); and
- b. An initial advertising, cleaning solution, and equipment package fee in the amount as set forth on the Summary Page of this Agreement, not including state or local taxes, which can vary, (the "Initial Package").
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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, the initial license fee that franchisees pay to CDI is non-refundable. The initial fee consists of the initial license fee for the right to use the Chem Dry marks and an initial package fee for advertising, cleaning solutions, and equipment. Once Chem Dry executes the franchise agreement, the initial license fee is considered fully earned and non-refundable.
If Chem Dry agrees to finance the initial license fee, the franchisee must make a down payment as specified on the Summary Page when signing the agreement and provide a Business Note for the remaining balance. This Business Note remains payable regardless of whether the agreement is terminated and is not subject to any claims or defenses arising from the agreement. Chem Dry has the right to assign or transfer the Business Note to a third party without notifying the franchisee.
This non-refundable policy is a standard practice in franchising, as the initial fee compensates the franchisor for the costs associated with granting the franchise and providing initial training and support. Prospective Chem Dry franchisees should carefully consider this non-refundable aspect and ensure they are fully committed to the franchise before signing the agreement and paying the initial fee.