Is there a written Guarantee of Performance from IDQ included in the Dq Treat FDD?
Dq_Treat Franchise · 2025 FDDAnswer from 2025 FDD Document
The following audited financial statements of IDQ are included in this disclosure document as Exhibit K: consolidated balance sheets of IDQ at December 31, 2024 and 2023 and related consolidated statements of income and comprehensive income, stockholder's equity and cash flows for each of the years ended December 31, 2024, 2023 and 2022, together with the independent auditor's report.
These financial statements are the consolidated financial statements of IDQ, the parent corporation of ADQ and its other subsidiaries. ADQ's separate financial statements are not included in this disclosure document. Should ADQ fail to fulfill its obligations to its franchisees, however, IDQ unconditionally guarantees to fulfill such obligations. A copy of IDQ's written Guarantee of Performance is included in Exhibit K.
Source: Item 21 — UItem 21U***:** U**Financial Statements (FDD page 67)
What This Means (2025 FDD)
According to the 2025 Dq Treat FDD, a written Guarantee of Performance from IDQ is included as Exhibit K. This guarantee is significant because IDQ, as the parent corporation of ADQ (the franchisor), commits to fulfilling ADQ's obligations to its franchisees should ADQ fail to do so. This provides an additional layer of security for Dq Treat franchisees.
In essence, the Guarantee of Performance means that IDQ is financially backing ADQ's promises and responsibilities outlined in the franchise agreement. This is a common practice in franchising when the direct franchisor is a subsidiary or has a weaker financial position than its parent company. The parent company's guarantee assures franchisees that there are sufficient resources to support the franchise system, even if the direct franchisor encounters financial difficulties.
Prospective Dq Treat franchisees should carefully review Exhibit K to understand the specific terms and conditions of IDQ's Guarantee of Performance. This includes understanding the scope of obligations guaranteed, any limitations on the guarantee, and the process for invoking the guarantee. Understanding these details is crucial for assessing the overall financial stability and security of the Dq Treat franchise system.