What is the length of the renewal franchise term offered by Chem Dry?
Chem_Dry Franchise · 2024 FDDAnswer from 2024 FDD Document
If FRANCHISEE meets certain conditions, then FRANCHISEE will have the option to acquire one successor franchise term of ten (10) years. FRANCHISEE must give CDI written notice of FRANCHISEE's election to acquire a renewal franchise no earlier than nine (9) months and not later than six (6) months before the end of the initial term of this Agreement. The qualifications and conditions for the renewal term are described below. Within thirty (30) days after delivery of FRANCHISEE's notice in writing whether or not CDI shall grant a renewal franchise to FRANCHISEE.
To qualify for a renewal franchise, FRANCHISEE and its Owners must satisfy these conditions:
- a. FRANCHISEE (and each of its Owners) have not defaulted under this Agreement and failed to cure the default within the time permitted under this Agreement during its Term;
- b. Franchisee (and each of its required Owners) have successfully completed all of CDI's then current training courses;
- c. FRANCHISEE (and each of its Owners) are, on the date FRANCHISEE gives its notice of election, in compliance with this Agreement, including without limitation any requirements regarding servicing national accounts; and
- d. FRANCHISEE agrees (regardless of cost) in the notice of election to add or replace specific Operating Assets, including without limitation any proprietary equipment associated with the Franchise, the business vehicles and other equipment), and otherwise modify the BUSINESS as CDI requires to comply with the System Standards then applicable for new entry CHEM-DRY Businesses.
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- If FRANCHISEE and each of its Owners are not, both on the date FRANCHISEE gives CDI written notice of FRANCHISEE'S election to acquire a renewal franchise and on the date on which the Term of the franchise expires, in compliance with this Agreement, FRANCHISEE acknowledges that CDI has no obligation to grant FRANCHISEE a renewal
franchise, whether or not CDI had, or chose to exercise, the right to terminate this Agreement during its term under Section 15.
- Notwithstanding anything to the contrary in this Agreement, at any time during the term of this Agreement, FRANCHISEE fails to be in compliance with this Agreement or any other agreement between FRANCHISEE and CDI, CDI may refuse to grant a renewal franchise by delivering a notice of CDI's refusal to grant a renewal franchise, stating the reasons for such refusal. If CDI'S notice indicates that CDI will permit FRANCHISEE to obtain a renewal franchise, CDI may condition such right upon FRANCHISEE'S continued compliance with this Agreement, including being current in financial obligations to CDI, and any other agreement between CDI and its affiliates and FRANCHISEE.
Source: Item 23 — Receipts (FDD pages 68–264)
What This Means (2024 FDD)
According to Chem Dry's 2024 Franchise Disclosure Document, a franchisee who meets certain conditions has the option to acquire one successor franchise term of ten years. To acquire a renewal franchise, the franchisee must provide Chem Dry with written notice of their election to acquire a renewal franchise no earlier than nine months and no later than six months before the end of the initial term of the agreement. Within thirty days after delivery of the franchisee's notice, Chem Dry will notify the franchisee in writing whether or not it will grant a renewal franchise.
To qualify for a renewal franchise, the franchisee and their owners must not have defaulted under the agreement and failed to cure the default within the time permitted during its term. They must also have successfully completed all of Chem Dry's then-current training courses and be in compliance with the agreement, including any requirements regarding servicing national accounts, on the date the franchisee gives its notice of election. Additionally, the franchisee must agree in the notice of election to add or replace specific operating assets, including any proprietary equipment associated with the franchise, the business vehicles, and other equipment, and otherwise modify the business as Chem Dry requires to comply with the system standards then applicable for new entry Chem Dry businesses.
If the franchisee and each of its owners are not in compliance with the agreement on both the date the franchisee gives written notice of their election to acquire a renewal franchise and on the date on which the term of the franchise expires, the franchisee acknowledges that Chem Dry has no obligation to grant a renewal franchise. This applies whether or not Chem Dry had, or chose to exercise, the right to terminate the agreement during its term. Chem Dry may refuse to grant a renewal franchise at any time during the term of the agreement if the franchisee fails to be in compliance with the agreement or any other agreement between the franchisee and Chem Dry. Chem Dry may condition such right upon the franchisee's continued compliance with the agreement, including being current in financial obligations to Chem Dry, and any other agreement between Chem Dry and its affiliates and the franchisee.