Under what circumstances are commissions or broker fees payable to Chem Dry during a transfer?

According to Chem Dry's 2024 Franchise Disclosure Document, commissions, broker fees, or other similar expenses are payable to Chem Dry under specific conditions during the transfer of a franchise. These fees become applicable if the franchisee lists their Chem Dry business with a broker, lead referral network, or similar entity to facilitate the sale. Additionally, these fees are also due if the transferee, the party buying the franchise, is referred to the franchisee or Chem Dry by a broker, lead referral network, or similar entity.

This means that if a franchisee uses a third-party broker or referral network to either list their business for sale or if the buyer comes through such a network, Chem Dry is entitled to commissions, broker fees, or similar expenses. This condition is in place to compensate Chem Dry for any involvement or assistance provided by these third-party entities in the transfer process. It is important for franchisees to understand this provision, as it can impact the net proceeds they receive from the sale of their franchise.

For a prospective franchisee, this highlights the importance of understanding all potential costs associated with transferring a Chem Dry franchise. If a franchisee chooses to use a broker or referral network, they should factor in these additional fees when determining the sale price and potential profit from the transfer. It also suggests that franchisees should consider the source of potential buyers and be aware of any referral networks involved to avoid unexpected commission fees. Franchisees should discuss this with Chem Dry to fully understand how these fees are calculated and under what specific circumstances they apply.