What is the additional fee Dryer Vent Squad charges on top of costs and expenses for reimbursement?
Dryer_Vent_Squad Franchise · 2024 FDDAnswer from 2024 FDD Document
| Type of (Note 1) | Amount | Due Date | Remarks |
|---|---|---|---|
| including audit, legal, travel and reasonable accommodations. | |||
| Quality Assurance Audit | Actual costs incurred by us | As invoiced | Payable if we engage a third party to perform periodic quality assurance audits, including mystery shopper programs. |
| Collections | Actual fees, costs, and expenses | On demand | For costs and expenses incurred by us in collecting fees due to us, and/or to enforce the terms of the franchise agreement or a termination of the franchise agreement. Includes costs and expenses of re-inspections required by quality assurance audit. |
| Reimbursement | Costs and expenses incurred by us, plus 10% of the costs and expenses incurred | 14 days of invoice | You shall reimburse us for costs and expenses incurred if we pay any amount that you owe or are required to pay to a third party, plus an additional fee of 10% of the costs and expenses incurred by us. |
| Transfer | Either: (a) $5,000 if the transferee is an existing franchisee; or (b) $12,500 for all other transfers | On demand | Payable if we approve your transfer request and upon signing our then current franchise agreement. |
| Renewal | 5% of our then current initial franchise fee | On signing renewal franchise agreement | Payable if we approve your renewal request and upon signing our then current franchise agreement. |
Source: Item 6 — OTHER FEES (FDD pages 16–21)
What This Means (2024 FDD)
According to Dryer Vent Squad's 2024 Franchise Disclosure Document, if Dryer Vent Squad pays an amount that a franchisee owes to a third party, the franchisee must reimburse Dryer Vent Squad for those costs and expenses. In addition to reimbursing the costs and expenses, Dryer Vent Squad charges an additional fee of 10% of the costs and expenses incurred. This reimbursement, including the additional 10% fee, is due within 14 days of the invoice date.
This policy means that franchisees need to be diligent in managing their financial obligations to third parties. If a franchisee fails to pay a vendor or other entity, and Dryer Vent Squad steps in to cover the debt, the franchisee will not only have to repay the original amount but also pay an extra 10% as a fee. This can add a significant financial burden on top of the original debt.
Franchisees should maintain open communication with Dryer Vent Squad regarding any potential financial difficulties to avoid this situation. Understanding the circumstances under which Dryer Vent Squad might make payments on their behalf and incurring this additional fee is crucial for financial planning and risk management. This policy is not uncommon in franchising, as it protects the franchisor from financial losses due to franchisee mismanagement while also incentivizing franchisees to handle their financial responsibilities promptly.