What rights does Chem Dry reserve in the event of collection proceedings?

According to Chem Dry's 2024 Franchise Disclosure Document, in the event that Chem Dry initiates collection proceedings, Chem Dry reserves the right to pursue costs associated with the collections. These costs include court costs and attorney fees. These rights are in accordance with the Business Note and Section 17 of the Franchise Agreement.

This means that if a Chem Dry franchisee fails to make payments on their Business Note and Chem Dry has to take legal action to recover the debt, the franchisee will be responsible for covering Chem Dry's legal expenses in addition to the outstanding debt and any accrued interest. This could significantly increase the amount the franchisee owes.

It is common practice in the franchise industry for franchise agreements and related financing documents to include provisions that allow the franchisor to recover collection costs and attorney fees from the franchisee in the event of default. This protects the franchisor's financial interests and ensures they are not further penalized by the franchisee's failure to meet their financial obligations. Prospective franchisees should carefully review the Business Note and Franchise Agreement to understand the full scope of their financial obligations and the potential consequences of non-payment.