When is the Initial License Fee due for a Chem Dry franchise, and is it refundable?
Chem_Dry Franchise · 2024 FDDAnswer from 2024 FDD Document
The Initial License Fee is due at the time you sign the Franchise Agreement and is non-refundable. If we determine that you are creditworthy, we may offer to finance up to forty percent (40%) of the Initial License Fee through a Business Note that you issue and sign on the form we provide when you sign the Franchise Agreement. If we approve you for financing, CDI will finance the remainder of the Initial License Fee through the Business Note over 56 months until the remaining balance is paid in full. All Business Note payments are due on or before the tenth day of each month and are non-refundable. Payments are non-refundable and generally begin the fourth month following completion of New Buyer Training, or, if you are an existing Franchisee buying an additional franchise, the fourth month following the signing of the Franchise Agreement. The Business Note bears simple interest at rates ranging from 8%-15% that we determine based on our underwriting standards. If you do not complete Initial and New Buyer Training by the deadline in your Franchise Agreement, your Business Note will be accelerated and due and payable in full. (See Item 10)
Source: Item 5 — INITIAL FEES (FDD pages 15–19)
What This Means (2024 FDD)
According to Chem Dry's 2024 Franchise Disclosure Document, the Initial License Fee is due when you sign the Franchise Agreement. The FDD clearly states that this fee is non-refundable.
Chem Dry may offer financing for up to 40% of the Initial License Fee to creditworthy franchisees through a Business Note. If approved, the remaining balance is financed over 56 months, with payments due on the tenth day of each month. These payments are also non-refundable and typically begin four months after completing New Buyer Training or, for existing franchisees acquiring an additional franchise, four months after signing the Franchise Agreement. The Business Note bears simple interest at a rate of 8%-15%, determined by Chem Dry's underwriting standards. Failure to complete the training by the deadline specified in the Franchise Agreement will result in the acceleration of the Business Note, making it immediately due and payable in full.
Prospective Chem Dry franchisees should be aware of the non-refundable nature of the Initial License Fee and all Business Note payments. It is crucial to carefully consider financial capabilities and the commitment to completing the required training within the specified timeframe. Understanding the terms of the Business Note, including the interest rate and payment schedule, is also essential for managing the financial obligations associated with the franchise.