What material terms and conditions of the transfer must Chem Dry approve?
Chem_Dry Franchise · 2024 FDDAnswer from 2024 FDD Document
fies following the effective date of the transfer;
t. FRANCHISEE and its transferring Owners (and any spouses or other immediate family members) acknowledge in a writing delivered to CDI that each of them will not, for two (2) years beginning on the transfer's effective date, engage in any of the activities proscribed in Section 16.D. below;
u. e have approved the material terms and conditions of the transfer, the form or purchase and sale agreement, and determined that the price and terms of payment will not adversely affect the transferee's operation of the BUSINESS. The purchase agreement between FRANCHISEE and the transferee must include: (a) a dollar breakdown of the sale price allocated to goodwill, covenant not to compete, van(s), cleaning equipment, cleaning supplies, and office equipment and supplies; and (b) a statement that FRANCHISEE has made a full disclosure to the transferee and that the parties have has agreed upon the disposition of all of FRANCHISEE'S outstanding obligations and accounts receivable;
v. the transferee purchases or obtains all equipment CDI then requires to operate a CHEM-DRY Businesses, if not included in the transaction (including, without limitation, proprietary equipment related to the Franchise); and
w. FRANCHISEE and its transferring Owners will not directly or indirectly at any time or in any manner (except with respect to other CHEM-DRY Businesses FRANCHISEE owns and operates) identify itself or themselves or any business as a current or former CHEM-DRY Business or as one of CDI's current or former franchisees; use any Mark, any colorable imitation of a Mark, or other indicia of a CHEM-DRY Business in any manner or for any purpose;
Source: Item 23 — Receipts (FDD pages 68–264)
What This Means (2024 FDD)
According to Chem Dry's 2024 Franchise Disclosure Document, Chem Dry must approve the material terms and conditions of the transfer. Chem Dry must also approve the form of purchase and sale agreement. Chem Dry will determine if the price and terms of payment will adversely affect the transferee's operation of the Chem Dry business.
The purchase agreement between the franchisee and the transferee must include a dollar breakdown of the sale price allocated to goodwill, a covenant not to compete, vans, cleaning equipment, cleaning supplies, and office equipment and supplies. The purchase agreement must also include a statement that the franchisee has made a full disclosure to the transferee and that the parties have agreed upon the disposition of all of the franchisee's outstanding obligations and accounts receivable.
In addition to the above, for Chem Dry to approve the transfer, the franchisee must be in full compliance with the Franchise Agreement and all other agreements between the franchisee, Chem Dry, its affiliates, or its designated/approved suppliers and vendors. The franchisee must have also paid all accrued monetary obligations to Chem Dry, its affiliates, and its designated/approved suppliers and vendors. The proposed transferee must submit a complete Chem Dry franchise application to Chem Dry and meet Chem Dry's then applicable standards and qualifications for a new business.