What specific agreements are amended by the California addendum to the Chem Dry Franchise Agreement?
Chem_Dry Franchise · 2024 FDDAnswer from 2024 FDD Document
EXHIBIT E
TO THE FRANCHISE AGREEMENT
STATE ADDENDA TO THE FRANCHISE AGREEMENT
ADDENDUM TO THE FRANCHISE AGREEMENT AND OTHER AGREEMENTS CALIFORNIA
This Addendum relates to franchises sold in the state of California and is intended to comply with California Franchise Investment Act. In consideration of the execution of the Franchise Agreement (the "Franchise Agreement") the Business Note (the "Business Note"), the Equipment Sales and Security Agreement (the "Equipment Agreement"), and the Software License Agreement (the "SLA"), CDI and Franchisee agree to amend the agreements as follows:
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- The California Franchise Relations Act, Business and Professions Code Sections 20000 to 20043, provides you with certain rights on termination or non-renewal of a franchise. If the Franchise Agreement contains a provision that is inconsistent with the law, the law will control.
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- California Corporations Code, Section 31125 requires us to give you a disclosure document approved by the Department of Corporations prior to solicitation of a proposed material modification of an existing franchise.
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- Our right to terminate pursuant to Section 15(15) of the Franchise Agreement if Franchisee commences bankruptcy may not be enforceable under federal bankruptcy law (11 U.S.C.A. 101 et seq.).
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- Under California Civil Code Section 1671, certain liquidated damages clauses are unenforceable.
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- Section 17.F. of the
Source: Item 22 — CONTRACTS (FDD page 68)
What This Means (2024 FDD)
According to Chem Dry's 2024 Franchise Disclosure Document, the California addendum amends the Franchise Agreement, Business Note, Equipment Sales and Security Agreement (Equipment Agreement), and the Software License Agreement (SLA). This addendum is included for franchises sold in California to comply with the California Franchise Investment Act.
Several specific points within these agreements are addressed by the addendum. The addendum clarifies that the California Franchise Relations Act takes precedence if any provision in the Franchise Agreement is inconsistent with the law. It also mentions that California Corporations Code requires Chem Dry to provide a disclosure document before any proposed material modification to an existing franchise is solicited.
Additionally, the addendum addresses termination rights in case of franchisee bankruptcy, stating that Chem Dry's right to terminate the agreement if a franchisee commences bankruptcy may not be enforceable under federal bankruptcy law. It also notes that certain liquidated damages clauses may be unenforceable under California Civil Code Section 1671. Finally, it specifies that the cost of arbitration will be shared equally between the parties, amending Section 17.F of the Franchise Agreement.