How is the maximum number of Chem-Dry franchises determined for a Franchised Area?
Chem_Dry Franchise · 2024 FDDAnswer 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 franchises allowed in a specific Franchised Area is determined by a formula based on the area's population. Chem-Dry calculates this number by dividing the current population of the Franchised Area by 60,000. The whole number nearest to the result of this division is the "Maximum Number" of Chem-Dry franchises that Chem-Dry may grant in that area. The total number of franchises granted cannot exceed this Maximum Number.
This calculation means that as the population of an area grows, the potential number of Chem-Dry franchises in that area may also increase. Conversely, if the population decreases, the Maximum Number may also decrease. However, Chem-Dry states that a decrease in the Maximum Number will not result in the termination of any existing franchises. This protects franchisees from losing their business due to population shifts.
Chem-Dry also retains the right to refuse to sell all available franchises in an area to a single franchisee or affiliated group. This likely aims to promote a diverse franchisee network and prevent any one entity from dominating a particular market. The minimum population size for a Franchised Area is typically 60,000, but in rural areas, it can be as low as 5,000, allowing Chem-Dry to expand into less densely populated regions.