Under what circumstances does Chem Dry charge the Administrative Fee?
Chem_Dry Franchise · 2024 FDDAnswer from 2024 FDD Document
S**, Franchisee desires to establish only one office located in one of its franchised areas and to operate all of the Franchises from that single office location; and
WHEREAS, CDI is willing to grant an exception to the office location requirement in the Agreements, on a limited, non transferrable, and revocable basis.
NOW, THEREFORE, in consideration of the mutual promises made herein, CDI and Franchisee agree to be bound by the following terms and conditions
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- Unless this COA is signed in conjunction with the sale of a new Chem-Dry franchise, Franchisee agrees to pay CDI a nonrefundable administration fee of $500.00 as consideration for the privilege of headquartering all Franchises from a single office location.
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- This COA will expire with the Franchise Agreement, and is non renewable and non-transferrable.
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- Pursuant to section 11 of the Agreements, Franchisee agrees to maintain and preserve full and accurate books for each franchise headquartered at the single office location.
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- Upon expiration of this COA, Franchisee may be eligible to enter into a second COA with CDI so long as Franchisee notifies CDI of its desire to do so at least sixty (60) days prior to the expiration of this COA. Any subsequent COAs will be upon then current terms and conditions and will require payment of the then current fee.
Source: Item 23 — Receipts (FDD pages 68–264)
What This Means (2024 FDD)
According to Chem Dry's 2024 Franchise Disclosure Document, an administrative fee of $500.00 is charged under specific circumstances related to headquartering multiple franchises from a single office location. Unless the Consolidated Office Agreement (COA) is signed in conjunction with the sale of a new Chem-Dry franchise, the franchisee must pay this nonrefundable fee. This fee grants the franchisee the privilege of managing all their franchises from one central office.
This agreement, and thus the administrative fee, is tied to the term of the Franchise Agreement and is non-renewable and non-transferable. If a franchisee wishes to continue headquartering multiple franchises from a single location after the initial COA expires, they must notify Chem Dry at least sixty days before the expiration date and enter into a new COA, which will involve paying the then-current fee. Chem Dry retains the discretion to deny subsequent COAs.
It's important to note that this COA can be terminated by Chem Dry with a 60-day written notice, with or without cause. If the agreement for the franchise where the headquarters is located terminates or expires, the franchisee must immediately move the office to another approved location. This fee and the associated agreement provide flexibility for franchisees managing multiple locations, but it comes with specific conditions and the potential for additional costs upon renewal.