Is there a referral fee associated with Dryer Vent Squad financing?
Dryer_Vent_Squad Franchise · 2024 FDDAnswer from 2024 FDD Document
| Finance Type | e | Operating Territory Type: Single Territory | Operating Territory Type: Double Territory |
|---|---|---|---|
| Amount Financed | Up to $14,000 of Initial Franchise Fee | Up to $28,000 of Initial Franchise Fee | |
| Down Payment | Minimum of $21,000 | Minimum of $42,000 | |
| Term | Up to two (2) years | Up to two (2) years | |
| Finance Charges | Ten percent (10%) APR | Ten percent (10%) APR | |
| Payment Amount | Depends on amount financed with repayment self-amortized over two (2) year repayment period with monthly installments of principal and interest paid monthly. | ||
| Payment Terms | Payable monthly over two (2) year repayment period with monthly installments of principal and interest paid monthly. No early pre-payment penalty. | ||
| Security Required | Personal guaranty by you and if you are a Corporate Entity then personal guaranty by each individual owner. Additional security in the form of a security agreement related to the assets of the Franchised Business and the filing of a UCC-1. | ||
| Liability Upon Default | Personal liability for the amount financed, plus interest, collection costs and legal fees. Additionally, default of Franchise Agreement and loss of franchise rights in the Franchised Business and other legal and equitable remedies available to us. | ||
| Loss of Legal Rights on Default | Cross-default of Franchise Agreement. Waiver of notice of default and loss of defenses | ||
| Referral Fee | Not applicable. |
Source: Item 10 — FINANCING (FDD pages 29–30)
What This Means (2024 FDD)
According to Dryer Vent Squad's 2024 Franchise Disclosure Document, whether a referral fee is applicable depends on the type of financing. Dryer Vent Squad may offer direct financing or indirect financing through third parties. If a franchisee requests indirect financing, Dryer Vent Squad may receive a referral fee from the third-party financing provider.
However, the FDD also provides a table outlining the terms for financing the initial franchise fee, and this table specifies whether a referral fee applies. For both single and double territory operations, the table indicates that the referral fee is "Not applicable." This suggests that if Dryer Vent Squad provides direct financing for the initial franchise fee, no referral fee is charged to the franchisee.
In summary, while Dryer Vent Squad may receive referral fees from third-party financing providers if a franchisee seeks indirect financing, no referral fee applies when Dryer Vent Squad directly finances the initial franchise fee for either single or double territory operations.