Chem-Dry
Date of Incorporation: 1977
Franchising Since: 1978
Headquarters: Logan, Utah
Country: U.S.
Description: The Franchisor is Harris Research, Inc. (HRI), which is the survivor of a merger between a Utah Corporation and Harris Research, Inc. a California corporation. Harris Research, Inc. was originally incorporated in California in November 1977. Harris Research, Inc. has designed and developed a method for establishing, operating and performing carpet and upholstery/drapery cleaning, spot removal, protective services, and tile and stone care services, using Harris Research, Inc.’s “Chem-Dry” specifications, standards, operating procedures, supplies and specialized equipment. On January 9 2006, The Home Depot acquired control of Harris Research, Inc. from Nautic Partners and others.
Franchise Offer: The franchise offered is for the operation of a Chem-Dry business which provided carpet cleaning, upholstery cleaning, spot removal and protecting services, including removing red stains, treating pet urine odor on carpets and imparting stain resistance to carpet fibers. The franchisee also may offer and perform additional approved services which may require certification by successful completion of additional training and/or the purchase of additional equipment and cleaning solutions.
Financial Assistance: The franchisee must pay HRI an initial franchise fee, which will vary based on the applicable package combination. The initial franchise fee for a Chem-Dry Business is comprised of an initial license fee and an initial cleaning solution, equipment and advertising materials package, sales tax included. Prior to signing the Franchise Agreement, the franchisee must pay Harris Research, Inc. in cash the non-refundable down payment. The balance will be financed by Harris Research, Inc. The franchisee is obligated to pay Harris Research, Inc. consecutive monthly payments towards the balance. Beginning with the fourth month following the Start Date of the Franchise Agreement, the franchisee will pay to Harris Research, Inc. the non-refundable monthly payment, per month for 56 consecutive months until the remaining balance of the initial franchise fee is paid. Outstanding balances of the purchase price bear 8% simple interest.
Training and Assistance: Before opening, the franchisee must complete the initial training on the operation of a Chem-Dry business and must train their employees. The franchisee is responsible for all travel expenses and living expenses which are incurred in connection with the training program. The training consists of both classroom and on-the-job training. The franchisee is required to complete at least one training course per calendar year for each authorized service the business offers.
Territory: The franchisee must operate the Chem-Dry Business within the non-exclusive Franchised Area identified in the Franchise Agreement. The number of franchises which can operate and perform Chem-Dry businesses per Franchised Area at any given time is determined by dividing the current population of the area by 60,000.
Term of Agreement and Renewal: The term of the franchisee agreement is five years with the option to renew for one additional term of five years.
Obligations and Restrictions: The franchisee must own, purchase or lease one or more white van(s) suitable for the purpose of transporting various equipment, supplies and materials needed to operate a Chem-Dry Business. The van must comply with standards of professionalism a consumer would expect from a professionally operated service business and meet all of the current Advertising Rules and Guidelines regarding type of van, color and proper markings. The franchisee is not obligated to participate personally in the direct operation of the Chem-Dry Business, although Harris Research, Inc. recommends that the franchisee does so.
Total Number of Units: More then 3,800 units worldwide.
Investment Tables:
Initial Investment:
| Name of Fee | Low | High |
|---|---|---|
| Initial Investment: | $10,950 | $12,950 |
| Initial Cleaning Solution, Equipment and Advertising Materials Package | $10,700 | $36,500 |
| Van | $0 | $35,000 |
| Three Month's Rent | $0 | $4,000 |
| Telephone and Business License | $75 | $4,000 |
| Training Expenses | $1,000 | $2,000 |
| Insurance | $600 | $6,000 |
| Additional Funds - 3 months | $250 | $9,000 |
| Computer System | $800 | $2,000 |
| Yellow Page/Advertising - 3 months | $900 | $10,000 |
| Total Estimated Initial Investment | $26,500 | $121,450 |
Ongoing Fees:
| Name of Fee | Amount |
|---|---|
| Monthly Franchise Fee | $350 |
| Yearly Minimum Purchase Amount | $3,000 |
| Optional Tile and Stone Care Service | $6,000 - $8,000 |
| Optional Water Damage Restoration Service | $2,209 |
| Optional Leather Cleaning Service | $500 - $1,200 |
| Program Handling & Processing Fee | Currently 15%-25% of invoice total |
| Referral Fee | Currently $40 per job completed |
| Fine for Improper Advertising | $2,000 |
| Fine for use and/or possession of NON Chem-Dry Products | $2,000 |
| Fine for unapproved Cleaning Systems or Equipment | $2,000 |
| Fine for accepting and performing a job outside of the franchised area | $2,000 |
| Transfer Fee | $1,000 - $4,000 |
| Guarantor Change | $200 |
| Successor Franchise Fee | $1,000 |
| Audit | $500 |
| Interest | Lesser of 1.5% per month or highest contract rate allowed by law |
| Training | $0 - $500 |
| Optional Additional Operations Manual | $100 - $250 |
| Costs and Attorneys' Fees | Will vary under circumstances |
| Indemnification | Will vary under circumstances |
| Equipment Transfer | $50 |
Date of FDD: 2010
The above information has been compiled from the FDD of Chem-Dry along with online sources.
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