Does Chem Dry have the right to determine the terms on which franchises are granted?
Chem_Dry Franchise · 2024 FDDAnswer from 2024 FDD Document
- (1) Subject to the foregoing limitations on the Maximum Number of franchises in the Franchised Area, to grant franchises for any area and on any terms CDI deems appropriate;
- (2) The right to develop, sell, manufacture or distribute, inside or outside the Franchise Area, whether in proximity to the Business or others, any type of product or service identified by or associated or identified with the Marks in any channel of distribution, including but not limited to telemarketing, direct marketing, television, catalogues, electronic media (i.e. including the Internet), and/or through retail or similar establishments or outlets;
- (3) The right to develop, sell, manufacture or distribute, inside or outside the Franchised Area, any type of product or service identified by trademarks or service marks other than the Marks in any channel of distribution including but not limited to telemarketing, direct marketing, television, catalogues, electronic media (i.e. including the Internet), and/or through retail or similar establishments or outlets; and
- (4) The right to conduct promotional programs and/or national account programs involving, without limitation, the offer, sale and delivery of Approved Services or other services to customers inside or outside the Franchised Area.
Source: Item 12 — TERRITORY (FDD pages 45–47)
What This Means (2024 FDD)
According to Chem-Dry's 2024 Franchise Disclosure Document, Chem-Dry retains the right to grant franchises for any area and on any terms it deems appropriate, subject to limitations on the maximum number of franchises in a franchised area. This means Chem-Dry has broad discretion in deciding who to award franchises to and under what conditions. This is a fairly standard practice in franchising, as franchisors need to ensure that new franchisees meet their operational and financial standards.
Chem-Dry also retains the right to develop, sell, manufacture, or distribute any type of product or service identified with its marks in any channel of distribution, whether inside or outside the franchised area. They can do this without compensating the franchisee. This includes telemarketing, direct marketing, television, catalogues, electronic media, and retail establishments. Chem-Dry also has the right to conduct promotional programs and national account programs, offering services to customers both inside and outside the franchised area.
For a prospective franchisee, this means that Chem-Dry can introduce competition within the franchisee's territory through various channels and is not obligated to compensate the franchisee for these activities. The franchisee's focus should be on maximizing their local market share and providing excellent service to retain customers, as Chem-Dry retains significant control over market strategies and franchise terms. It is important to note that the franchisor's decisions can impact a franchisee's business, so understanding these terms is crucial before investing in a Chem-Dry franchise.