factual

Can the maximum number of Chem-Dry franchises in an area change over time?

Chem_Dry Franchise · 2024 FDD

Answer from 2024 FDD Document

The number of franchises which can operate as Chem-Dry Businesses in a Franchised Area is determined by dividing the current population of the area by 60,000. The nearest whole number to the quotient (referred to as "Maximum Number") is the number of franchises that CDI may grant in the area for operating and conducting a Chem-Dry business. The sum of franchises granted in the Franchised Area cannot exceed the Maximum Number. We, another franchisee or a third party designated by CDI may service national accounts in your Franchised Area if you elect not to service a national account or if a national account elects not to do business with you. The Franchised Area will be determined by CDI based on population, population density, geographical terrain and market potential. CDI reserves the right to refuse to sell all of the franchises available for an Assigned Area to single franchisee or an affiliated group. Typically, the minimum size of a Franchised Area is a geographic area having a population of at least 60,000 but in some rural, less-populated areas the Franchised Area might have a population as small as about 5,000. Based on population changes, the Maximum Number may increase or decrease and may not remain constant; however, the Maximum Number only affects CDI's ability to grant franchises and no franchise will be terminated solely as a result of a decrease in the Maximum Number.

Source: Item 12 — TERRITORY (FDD pages 45–47)

What This Means (2024 FDD)

According to Chem-Dry's 2024 Franchise Disclosure Document, the maximum number of Chem-Dry franchises that can operate in a specific area is not fixed and can fluctuate over time. The FDD specifies that the number of franchises allowed in a franchised area is determined by dividing the current population of that area by 60,000. The resulting whole number, referred to as the "Maximum Number," dictates the number of Chem-Dry franchises that Chem-Dry may grant in that area. The total number of franchises granted cannot exceed this Maximum Number.

Because the calculation for the maximum number of franchises is directly tied to the population of the area, any changes in population will affect the maximum number. The FDD explicitly states that based on population changes, the Maximum Number may increase or decrease and may not remain constant. This means that as an area's population grows, Chem-Dry may allow more franchises to operate there. Conversely, if the population declines, the number of new franchises Chem-Dry can grant will decrease.

It is important to note that while the Maximum Number can change, the FDD states that no existing Chem-Dry franchise will be terminated solely due to a decrease in the Maximum Number. This provides some security for franchisees already operating in an area that experiences population decline. However, the change in the maximum number only affects Chem-Dry's ability to grant franchises.

Disclaimer: This information is extracted from the 2024 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.