What is the prohibited action for a lender regarding Chem Dry equipment after marshalling and assembling it for sale?

According to Chem Dry's 2024 Franchise Disclosure Document, a lender who has taken possession of Chem Dry equipment and assembled it for sale is specifically prohibited from using the equipment in any way. The lender also cannot rent, lease, sell, lend, or donate the equipment.

This restriction is in place to protect the Chem Dry brand and ensure that the equipment is only used by authorized franchisees who adhere to Chem Dry's standards and procedures. It also ensures that the equipment is not used in a way that could damage the Chem Dry brand or create confusion in the marketplace.

If the lender is unable to resell the equipment to another Chem Dry franchisee within 60 days after first offering it for sale, Chem Dry will purchase the equipment as outlined in Section 5 of the agreement. This provides a clear exit strategy for the lender and ensures that the equipment remains within the Chem Dry system.

This arrangement protects Chem Dry's interests by controlling the use and transfer of its proprietary equipment, while also providing a mechanism for lenders to recover their investment if a franchisee defaults. Prospective franchisees should understand these conditions and how they might affect financing options and equipment disposal in default scenarios.