What monthly franchise fees must be paid to Chem Dry by the franchisee during a transfer?
Chem_Dry Franchise · 2024 FDDAnswer from 2024 FDD Document
et off or defenses arising under this Agreement. CDI may assign, pledge or transfer the Business Note to a third party without notice to FRANCHISEE.
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- Upon execution of this Agreement by CDI, the Initial License Fee shall be deemed fully earned and non-refundable.
B. MONTHLY FRANCHISE FEE
- FRANCHISEE agrees to pay CDI a continuing, non-refundable monthly franchise fee (the "Monthly Franchise Fee") in the amount as set forth on the Summary Page to this Agreement, beginning on the tenth (10th) day of either (A) the fourth (4th) month after FRANCHISEE completes initial training, (B) if FRANCHISEE is an existing Chem-Dry franchisee, the fourth (4th) month after the Effective Date of this Agreement, or (C) if this is a transfer or succession of an existing Chem-Dry business, the tenth (10th) day of the month after the Effective Date of this agreement (the "Payment Start Date") for a license to operate the BUSINESS.
Source: Item 23 — Receipts (FDD pages 68–264)
What This Means (2024 FDD)
According to Chem Dry's 2024 Franchise Disclosure Document, if a Chem-Dry business is transferred, the new franchisee must pay a continuing, non-refundable monthly franchise fee. The amount of this fee is set forth on the Summary Page of the Franchise Agreement. This payment begins on the tenth day of the month after the effective date of the transfer agreement.
This means that a new Chem Dry franchisee taking over an existing business will need to budget for this ongoing monthly fee from almost the moment the transfer is complete. The specific amount will vary depending on the agreement, so it's crucial to review the Summary Page carefully.
In addition to the monthly franchise fee, the transferring franchisee must also pay all Monthly Franchise Fees for completed jobs up through the date of closing, fees, amounts owed under any promissory notes with Chem Dry, late payment fees, late report fees, NSF Fees, interest fees, and all other fees or amounts owed to Chem Dry, plus interest.