What is the minimum annual cleaning solution purchase amount required from Chem Dry franchisees?
Chem_Dry Franchise · 2024 FDDAnswer from 2024 FDD Document
D SERVICES**
-
- FRANCHISEE agrees to use only such Operating Assets and other equipment, cleaning solutions, supplies, promotional materials and business services which have either been approved by CDI or purchased from CDI, its affiliates or other sources, approved or designated by CDI from time to time. FRANCHISEE agrees to purchase all cleaning solutions only from CDI or its affiliates or approved or designated suppliers at the then current list price, plus applicable taxes, and to pay for all purchases no later than thirty (30) days from the invoice date. FRANCHISEE is required to purchase a minimum of $3,244.50 (increased not more than once each calendar year to reflect increases in The Metropolitan Area Consumer Index for Urban Consumers-All Items (1982-1984 = 100) as published by the U.S. Department of Labor or in a successor index (the "Consumer Price Index") of cleaning solution from CDI or its affiliates each calendar year ("Minimum Purchase Amount"). FRANCHISEE may be required to purchase additional amounts of certain products (including a designated mix of product) to meet the product minimums as outlined in the Manual.
Source: Item 23 — Receipts (FDD pages 68–264)
What This Means (2024 FDD)
According to Chem Dry's 2024 Franchise Disclosure Document, franchisees must purchase a minimum of $3,244.50 of cleaning solutions from Chem Dry or its affiliates each calendar year. This is referred to as the "Minimum Purchase Amount." This amount can be increased no more than once per calendar year to reflect increases in the Metropolitan Area Consumer Index for Urban Consumers-All Items (1982-1984 = 100) as published by the U.S. Department of Labor, or a successor index (the "Consumer Price Index").
Chem Dry franchisees are required to purchase cleaning solutions exclusively from Chem Dry, its affiliates, or approved suppliers. These purchases must be paid no later than thirty days from the invoice date. The FDD also states that franchisees may be required to purchase additional amounts of certain products, including a designated mix of products, to meet the product minimums as outlined in the Manual.
Failure to adhere to Chem Dry's approved cleaning processes or using non-approved cleaning solutions can result in a fine of $5,000 per occurrence or termination of the Franchise Agreement. This underscores the importance of sourcing cleaning solutions directly from Chem Dry or its designated suppliers to maintain compliance and avoid penalties.
This requirement ensures brand consistency and quality control across all Chem Dry franchises. Prospective franchisees should factor this mandatory annual purchase into their operating cost projections and understand the potential for price adjustments based on the Consumer Price Index.