When does the risk of loss and title to the equipment transfer to the Chem-Dry franchisee?
Chem_Dry Franchise · 2024 FDDAnswer from 2024 FDD Document
SHIPMENT, TITLE & RISK OF LOSS. CDI will arrange for shipment of the Equipment on the Schedule to Franchisee. Risk of loss and title to the Equipment transfers to Franchisee upon delivery, subject to any security interest of CDI retained under this Agreement. Franchisee shall inspect each shipment promptly upon receipt and will be deemed to accept the Equipment as conforming to the Schedule unless any defects or deficiencies are noted to CDI within 2 business days after delivery. Franchisee agrees, if no defects or deficiencies are reported within this time period, all sales are final.
Source: Item 23 — Receipts (FDD pages 68–264)
What This Means (2024 FDD)
According to Chem-Dry's 2024 Franchise Disclosure Document, the risk of loss and title to the equipment purchased by the franchisee transfers upon delivery of the equipment. This transfer is subject to any security interest that Chem-Dry, Inc. (CDI) retains under the Equipment Sales and Security Agreement.
Upon receiving the equipment, the Chem-Dry franchisee is required to promptly inspect the shipment. The franchisee is deemed to have accepted the equipment as conforming to the schedule unless any defects or deficiencies are reported to CDI within 2 business days after delivery. If no defects or deficiencies are reported within this timeframe, the sale is considered final.
This arrangement means that the Chem-Dry franchisee bears the responsibility for any loss or damage to the equipment from the moment it is delivered. It is crucial for the franchisee to conduct a thorough inspection immediately upon receipt to identify and report any issues within the specified 2-day period. Failure to do so results in the acceptance of the equipment in its delivered condition, with no further recourse for unreported defects or deficiencies.