DRYMedic
Home Services
Founded 197189 locationsCompany Profile
Year Founded:1971
DRYMedic Franchise Cost
| Franchise Fee: | $45,000Key Metric |
| Total Investment: | $196,000 - $319,000Key Metric |
| Liquid Capital: | $47,500 |
| Royalty Fee: | 6% of gross sales |
| Marketing Fee: | 1% of gross sales |
Quick ROI Calculator
Based on DRYMedic's actual financial data
Outlet Counts by Year
Historical outlet data extracted from FDD documents
Total US Locations:89
Scale relative to 1,000 locations
Franchised Units:67
Corporate Units:22
Additional Information
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AI-Powered Due Diligence Analysis
Our advanced AI analyzes Franchise Disclosure Documents (FDDs) to identify potential risks and opportunities across 10 critical categories.
11
High Risk
Critical items
25% of total
23
Medium Risk
Monitor closely
52% of total
10
Low Risk
Manageable items
23% of total
44
Total Items
Factors analyzed
10 categories
5.11
Overall Score
Low RiskHigh Risk
010
Franchisor Stability Risks
5 risks identified
1
3
1
Dependence on Management Company (AB Inc.)
High
Explanation:
- DRYMedic relies on a management agreement with AB Inc. for crucial support and services to franchisees.
- AB Inc. has no direct contractual obligation to franchisees and doesn't guarantee DRYMedic's obligations. This creates a significant risk if the relationship between DRYMedic and AB Inc. deteriorates or if AB Inc. experiences financial difficulties.
- The recent name change of AB Inc. from Villa BidCo, Inc. in 2021 raises questions about its history and potential instability.
Potential Mitigations:
- Thoroughly investigate the history, financial stability, and management of AB Inc. Review the audited financial statements in Exhibit I in detail.
- Seek legal counsel to understand the implications of the management agreement and the lack of direct guarantees from AB Inc.
- Inquire about the reasons for the name change and any related business restructuring.
- Negotiate stronger contractual protections within the franchise agreement to address potential disruptions in services from AB Inc.
FDD Citations:
- Item 1: "AB Inc. provides support and services to our franchisees under a management agreement with us."
- Item 1: "AB Inc. was formerly known as Villa BidCo, Inc."
- Item 1: "These financial statements are included for disclosure purposes only; AB Inc. is not a party to the Franchise Agreement...nor does it guarantee our obligations."
Limited Operating History Under Current Structure
Medium
Explanation:
- While DRYMedic was founded in 1971, the FDD mentions AB Inc.'s involvement in providing support and services. It's unclear how long the current operational structure with AB Inc. has been in place.
- A shorter history under the current structure increases the uncertainty of its effectiveness and long-term viability.
Potential Mitigations:
- Clarify the duration of the relationship between DRYMedic and AB Inc. and the history of this operational structure.
- Inquire about the rationale behind the current structure and any previous models used.
- Assess the experience and track record of the management teams of both DRYMedic and AB Inc. under the current arrangement.
FDD Citations:
- Item 1: "AB Inc. provides support and services to our franchisees under a management agreement with us."
Potential for Rapid Growth Challenges
Medium
Explanation:
- Item 20 reveals significant growth in the number of outlets, particularly between 2023 and 2024 (from 43 to 67). Table 5 further projects substantial additional growth.
- Rapid expansion can strain resources, training programs, and support infrastructure, potentially impacting franchisee success and the overall brand.
Potential Mitigations:
- Carefully evaluate DRYMedic's plans for managing this projected growth, including training, support, and quality control.
- Inquire about the historical success rate of new franchisees and the support provided during the initial phases.
- Speak with existing franchisees about their experiences with the franchisor's support and resources.
FDD Citations:
- Item 20, Table 3: Outlet growth from 43 to 67 between 2023 and 2024.
- Item 20, Table 5: Projections for new franchise outlets.
Concentrated Franchisee Ownership (Potential Risk)
Medium
Explanation:
- Item 20, Note 3 mentions 40 franchisees operating as of December 31, 2024, with Exhibit F detailing the number of territories per franchisee. This suggests the possibility of some franchisees owning multiple territories.
- While not inherently negative, a high concentration of ownership with a few large franchisees can create an imbalance of power and potentially influence decisions that may not benefit smaller franchisees.
Potential Mitigations:
- Review Exhibit F to understand the distribution of territories among franchisees and identify any significant concentrations.
- Discuss with existing franchisees their perspectives on the influence of larger franchisees within the system.
- Inquire about the franchisor's communication and decision-making processes and how they ensure fair representation of all franchisees.
FDD Citations:
- Item 20, Note 3: "As of December 31, 2024, there were 40 franchisees in operation; the number of territories in operation for each franchisee is shown in Exhibit F."
Lack of Litigation Disclosure Specificity
Low
Explanation:
- While Item 3 states there are no pending or past significant legal actions, the term "routine litigation incidental to the business" lacks specificity.
- This ambiguity makes it difficult to assess the true legal landscape and potential risks.
Potential Mitigations:
- Request further clarification on the types and frequency of "routine litigation" experienced by the franchisor.
- Conduct independent research to identify any publicly available information regarding legal actions involving DRYMedic or its affiliates.
FDD Citations:
- State Addenda - New York, Item 3B: "No such party has pending actions, other than routine litigation incidental to the business..."
Disclosure & Representation Risks
3 risks identified
1
2
Vague Definition of 'Gross Revenue'
Medium
Explanation:
- The definition of "Gross Revenue" includes broad language like "all revenue...of every kind related to the Franchised Business" and "even if you have contracted with third parties to provide certain of the services." This vagueness could lead to disputes over what constitutes Gross Revenue and how royalty fees are calculated.
- The franchisor reserves the right to modify its policies regarding revenue recognition, which creates uncertainty and potential for increased fees in the future.
Potential Mitigations:
- Request clarification in writing from the franchisor regarding specific scenarios and how they would be treated under the Gross Revenue definition.
- Negotiate a more specific definition of Gross Revenue that clearly outlines inclusions and exclusions.
- Consult with a franchise attorney to review the definition and potential implications.
FDD Citations:
- Item 23, Exhibit A, Franchise Agreement, Section 1.13: "'Gross Revenue' means all revenue...of every kind related to the Franchised Business..."
- Item 23, Exhibit A, Franchise Agreement, Section 1.13: "We reserve the right to modify our policies and practices regarding revenue recognition..."
Unilateral Control over Brand Standards
Medium
Explanation:
- The franchisor has complete control over Brand Standards and Manuals, with the right to modify, replace, and supplement them at any time. This could lead to unexpected costs and operational disruptions for the franchisee.
- Section 12 grants the franchisor broad discretion to enforce Brand Standards, potentially leading to subjective interpretations and disputes.
Potential Mitigations:
- Request a clear process for how changes to Brand Standards will be communicated and implemented.
- Negotiate a reasonable timeframe for implementing changes to minimize disruption.
- Review the current Brand Standards Manuals thoroughly to understand existing requirements.
FDD Citations:
- Item 23, Exhibit A, Franchise Agreement, Section 1.7: "...all of which we can modify, replace and supplement."
- Item 23, Exhibit A, Franchise Agreement, Section 12: "...enforce the Brand Standards in any manner it deems appropriate."
Broad Restrictions on Competition
High
Explanation:
- Section 14 and Appendix C impose significant restrictions on competition, both during and after the franchise agreement term. This could limit future business opportunities for the franchisee.
- The restrictions are broad, covering any "similar business" and extending to a wide geographic area.
Potential Mitigations:
- Negotiate a narrower scope for the non-compete clause, both geographically and in terms of the types of businesses covered.
- Seek legal advice to fully understand the implications of the non-compete restrictions.
FDD Citations:
- Item 23, Exhibit A, Franchise Agreement, Section 14: "...any similar business..."
- Item 23, Exhibit A, Franchise Agreement, Appendix C: "...within the Protected Area..."
Financial & Fee Risks
3 risks identified
2
1
Initial Franchise Fee Profit for Franchisor
Low
Explanation:
- The FDD discloses that a portion of the initial franchise fee is profit for the franchisor. This raises concerns about whether the fee is truly reflective of the services and support provided to new franchisees.
- If a significant portion is profit, it could indicate less investment back into franchisee support and development.
Potential Mitigations:
- Carefully compare the initial franchise fee with other similar franchises to assess competitiveness.
- Inquire about the specific allocation of the fee and how it supports franchisee onboarding and ongoing operations.
- Negotiate a lower fee or request additional services in exchange for the fee.
FDD Citations:
- Item 5, Additional Disclosure: "A portion of the initial franchise fee may be profit to us."
Limited Financial Performance Representation
Medium
Explanation:
- The FDD provides limited financial performance information, covering only 21 out of 40 franchisees (52.5%) for the 2024 fiscal year. A significant number of franchisees were excluded for various reasons (ceased operations, incomplete data, newly opened).
- This limited sample may not accurately represent the potential financial performance of a new franchisee.
- The wide range in reported Gross Revenue, from $36,189 to $3,125,831, indicates significant variability and potential volatility in earnings.
Potential Mitigations:
- Request further financial information from the franchisor, including data from excluded franchisees, if possible.
- Interview existing franchisees, including those excluded from the FDD's financial performance representation, to understand the factors influencing their revenue.
- Conduct independent market research to assess the local demand for DRYMedic's services and potential revenue in your target area.
FDD Citations:
- Item 19: "As of December 31, 2024, we had 40 franchisees operating in 67 Territories."
- Item 19: "Tables 1 and 2 present information on 21 franchisees (representing 35 Territories) that were in operation for the entire 2024 fiscal year."
Dependence on Insurance and Government Programs
Medium
Explanation:
- The definition of Gross Revenue includes "amounts billed to insurance or government programs." This indicates a reliance on third-party payers, which can introduce payment delays, denials, and administrative complexities.
- Changes in insurance policies or government regulations could significantly impact revenue streams.
Potential Mitigations:
- Develop a robust billing and collections process to manage interactions with insurance companies and government agencies.
- Diversify revenue streams by targeting non-insurance and non-government clients.
- Stay informed about changes in relevant insurance policies and government regulations.
FDD Citations:
- Item 19, Table 1 Notes: "Gross Revenue also includes amounts billed to insurance or government programs."
Legal & Contract Risks
3 risks identified
2
1
Superseding State Law
Medium
Explanation:
- Washington's franchise laws (RCW 19.100.180) may override the franchise agreement regarding termination and renewal, potentially impacting the franchisee's investment and business operations.
- Court decisions can also supersede the agreement, creating uncertainty and potential legal challenges.
Potential Mitigations:
- Carefully review RCW 19.100.180 and relevant case law with a Washington franchise attorney to understand potential impacts on the franchise agreement.
- Negotiate favorable terms regarding termination and renewal within the boundaries of state law.
FDD Citations:
- Item 2: "RCW 19.100.180 may supersede provisions in the franchise agreement...concerning your relationship with the franchisor, including in the areas of termination and renewal..."
Mandatory Washington Dispute Resolution Venue
Low
Explanation:
- Washington State requires arbitration or mediation to occur in Washington or a mutually agreed location, potentially increasing travel costs and logistical challenges for out-of-state franchisees.
Potential Mitigations:
- Factor potential travel costs for dispute resolution into the overall investment budget.
- Negotiate a mutually agreeable location for dispute resolution in advance.
FDD Citations:
- Item 3: "...the arbitration or mediation site will be either in the state of Washington, or in a place mutually agreed upon..."
Limited Waiver of Rights
Medium
Explanation:
- Franchisees cannot waive rights under the Washington Franchise Investment Protection Act except in specific post-agreement, independently counseled settlements, limiting the franchisor's ability to enforce certain provisions.
Potential Mitigations:
- Understand the protections afforded by the Washington Franchise Investment Protection Act.
- Consult with a Washington franchise attorney to ensure any settlement agreements are compliant with the law.
FDD Citations:
- Item 4: "A release or waiver of rights executed by a franchisee will not include rights under the Washington Franchise Investment Protection Act..."
Territory & Competition Risks
5 risks identified
2
2
1
Mandatory Key Account Servicing & Potential Loss of Control
High
Explanation:
- Franchisees are obligated to service Key Accounts within their territory, regardless of profitability or logistical challenges. Refusal or deemed inability to service these accounts can lead to the franchisor assigning the work to another franchisee or corporate, resulting in lost revenue and potential reputational damage.
Potential Mitigations:
- Thoroughly review Item 12 of the FDD to understand the Key Account program's details, including the selection criteria, service requirements, and potential financial implications.
- Negotiate with the franchisor for clearer definitions of "qualified, interested, able, or available" to service Key Accounts and establish a fair process for determining inability to service.
- Assess the potential impact of Key Accounts on business operations during territory selection and factor this into financial projections.
FDD Citations:
- "You must provide services for any Key Accounts with locations in your Territory (see Item 12). If you refuse to perform the required services, or if we determine that your Franchised Business is not qualified, interested, able or available to perform the services, you are required to allow us or another franchisee to service the Key Account."
Territorial Restrictions and Expansion Limitations
Medium
Explanation:
- Franchisees are restricted from actively soliciting business outside their designated territory without prior approval, which may limit growth opportunities and create potential conflicts if customers from outside the territory initiate contact.
- While passive servicing outside the territory is allowed under certain conditions, the franchisor's control over these activities can create operational complexities and potential disputes.
Potential Mitigations:
- Carefully review Item 12 and the Franchise Agreement to understand the precise boundaries of the territory and the rules governing outside operations.
- Clarify with the franchisor the process for obtaining approval to solicit business outside the territory and the criteria used for granting such approvals.
- Develop a marketing strategy that focuses on maximizing penetration within the assigned territory while complying with the franchisor's restrictions.
FDD Citations:
- "You may not actively solicit work related to the Franchised Business outside of your Territory without our approval… You may otherwise provide services and sell products outside the Territory so long as you comply with the standards we specify in the Manual or otherwise in writing."
Mandatory Participation in Franchisor Programs
Medium
Explanation:
- Franchisees are required to participate in various franchisor-mandated programs, including gift cards, loyalty programs, and warranties, which may involve additional costs, administrative burdens, and potential revenue sharing.
- The franchisor's control over these programs limits flexibility and may not align with the franchisee's local marketing strategies.
Potential Mitigations:
- Request detailed information about all mandatory programs, including associated costs, revenue sharing arrangements, and operational requirements.
- Assess the potential impact of these programs on profitability and customer experience.
- Negotiate with the franchisor for greater flexibility in implementing and adapting these programs to local market conditions.
FDD Citations:
- "You may be required to participate in programs relating to gift cards…You are also required to participate in any customer loyalty programs and workmanship warranties that we prescribe."
Dependence on Third-Party Management Company (AB Inc.)
High
Explanation:
- The franchisor relies on a third-party management company, AB Inc., for support and services. While AB Inc.'s financials are disclosed, it is not a party to the Franchise Agreement and does not guarantee the franchisor's obligations. This creates a potential risk if AB Inc. experiences financial difficulties or operational issues, which could disrupt support services and negatively impact franchisees.
Potential Mitigations:
- Carefully review the management agreement between the franchisor and AB Inc. to understand the scope of services provided and the terms of the relationship.
- Assess AB Inc.'s financial stability and operational capabilities based on the information provided in Exhibit I.
- Inquire about contingency plans in case of disruptions to AB Inc.'s services.
FDD Citations:
- "As described in Item 1, AB Inc. provides support and services to our franchisees under a management agreement with us…These financial statements are included for disclosure purposes only; AB Inc. is not a party to the Franchise Agreement we sign with franchisees, nor does it guarantee our obligations under the Franchise Agreement we sign with franchisees."
Limited Control over Own Gift/Loyalty Programs
Low
Explanation:
- Franchisees cannot implement their own gift card, electronic money, or loyalty programs without prior written approval from the franchisor, limiting their ability to tailor promotions and customer retention strategies to their specific local market.
Potential Mitigations:
- Discuss the franchisor's policies regarding franchisee-initiated programs and understand the criteria for approval.
- Propose innovative program ideas to the franchisor and seek collaborative opportunities to enhance customer engagement within the existing framework.
FDD Citations:
- "You may not offer your own gift card, electronic money, or loyalty program for the Franchised Business without our prior written approval."
Regulatory & Compliance Risks
7 risks identified
2
3
2
Lack of Financial Guarantees from Related Party
High
Explanation:
- AB Inc., a related party providing support and services under a management agreement, does not guarantee the franchisor's obligations under the Franchise Agreement.
- This creates a risk that if the franchisor faces financial difficulties, AB Inc. is not obligated to support the franchisee, potentially jeopardizing the franchisee's operations and investment.
Potential Mitigations:
- Carefully review the management agreement between the franchisor and AB Inc. to understand the scope of services and support provided.
- Assess the financial stability of both the franchisor and AB Inc. independently.
- Seek legal counsel to understand the implications of the lack of guarantee and explore potential negotiation options for stronger protections.
FDD Citations:
- Item 1: "These financial statements are included for disclosure purposes only; AB Inc. is not a party to the Franchise Agreement we sign with franchisees, nor does it guarantee our obligations under the Franchise Agreement we sign with franchisees."
Mandatory Sourcing Restrictions and Potential Conflicts of Interest
High
Explanation:
- The franchisor mandates the purchase of equipment, supplies, and services from approved vendors, including itself and affiliates, potentially at inflated prices.
- The franchisor and its affiliates profit from these mandatory purchases, creating a conflict of interest.
- Rebates, fees, and commissions received by the franchisor from vendors may not be passed on to franchisees, further increasing costs.
Potential Mitigations:
- Compare prices of mandated products and services with market rates to assess potential markups.
- Negotiate with the franchisor for greater flexibility in sourcing, especially for non-core products and services.
- Consult with existing franchisees about their experiences with mandatory sourcing and related costs.
FDD Citations:
- Item 8: "We and our affiliates earn a profit on products and services we sell to you directly, and we and our affiliates receive rebates, administrative fees, commissions, licensing fees, or other benefits from unaffiliated vendors and distributors with respect to their sales of products or services to you or other DRYMEDIC franchisees."
- Item 8: "You must purchase from us or affiliates: Equipment and Vehicle Outfitting."
- Item 8: "Operational Software. You must license from BuyMax and use in your Franchised Business the DASH software owned by a third party…"
Dependence on Third-Party Software
Medium
Explanation:
- Franchisees are required to license and use DASH software owned by a third party, BuyMax.
- This creates dependence on a third-party vendor, which could lead to disruptions in service, price increases, or unfavorable contract terms.
Potential Mitigations:
- Review the Software User Agreement with BuyMax carefully, paying attention to terms related to fees, service levels, and termination.
- Research BuyMax's reputation and financial stability.
- Inquire about alternative software options and the possibility of using them.
FDD Citations:
- Item 8: "Operational Software. You must license from BuyMax and use in your Franchised Business the DASH software owned by a third party…"
Changes to Specifications and Approved Vendors
Medium
Explanation:
- The franchisor retains the right to change specifications for products and services and the list of approved vendors at any time.
- This could lead to increased costs, disruptions in supply chains, and the need to replace existing equipment or inventory.
Potential Mitigations:
- Request clear communication protocols regarding changes in specifications and approved vendors.
- Negotiate for reasonable notice periods and grandfathering provisions for existing equipment and inventory.
- Join a franchisee association to collectively address potential issues related to vendor changes.
FDD Citations:
- Item 8: "We have the right to require that all equipment…be purchased only from vendors that we have expressly approved…We can impose other restrictions at any time."
Mandatory Sales and Marketing Purchases
Medium
Explanation:
- Franchisees are required to purchase certain sales and marketing materials and services from the franchisor or its affiliates.
- This limits flexibility in marketing strategies and may result in higher costs or ineffective marketing campaigns.
Potential Mitigations:
- Review the costs and quality of mandatory sales and marketing materials and services.
- Negotiate for greater flexibility in choosing marketing vendors and strategies.
- Seek input from existing franchisees about the effectiveness of the franchisor's marketing programs.
FDD Citations:
- Item 8: "You must also order certain sales and marketing materials and services from us or our affiliates."
Name Change of Related Party
Low
Explanation:
- The recent name change of AB Inc. from Villa BidCo, Inc. warrants further investigation to ensure transparency and understand the reasons behind the change.
- While not inherently a risk, it could indicate potential underlying issues that require due diligence.
Potential Mitigations:
- Research the history of both AB Inc. and Villa BidCo, Inc. to identify any potential legal or financial issues.
- Inquire with the franchisor about the reasons for the name change.
FDD Citations:
- Item 1: "AB Inc. was formerly known as Villa BidCo, Inc. until the company changed its name on May 17, 2021."
Limited Disclosure of Past Bankruptcy
Low
Explanation:
- Item 4 discloses the absence of bankruptcy filings for the franchisor and its affiliates within a specific timeframe. However, it's important to acknowledge that events outside this timeframe are not disclosed and could still pose a risk.
Potential Mitigations:
- Conduct independent research on the franchisor and its affiliates to identify any past bankruptcy filings or other financial difficulties outside the disclosed timeframe.
FDD Citations:
- Item 4: "Except as described in this Item, neither Franchisor, its affiliates, its predecessors, officers, nor general partners, during the ten-year period immediately before the date of the disclosure document…"
Franchisor Support Risks
5 risks identified
1
3
1
Mandatory Sourcing Restrictions and Potential Markups
High
Explanation:
- DRYMedic mandates purchasing equipment, supplies, and other materials from approved vendors or directly from them, potentially limiting franchisees' ability to negotiate better prices or choose preferred suppliers.
- The franchisor and its affiliates profit from these sales, creating a potential conflict of interest where they might prioritize higher profits over franchisee cost savings.
- Rebates, fees, and commissions received by the franchisor from vendors further raise concerns about transparency and potential overpricing.
Potential Mitigations:
- Carefully review Item 8 and all related agreements to fully understand the scope of purchasing restrictions and associated costs.
- Compare prices from approved vendors with market rates to assess potential markups.
- Inquire about the franchisor's profit margins on mandatory purchases and the details of any rebates or commissions they receive.
- Consult with existing franchisees about their experiences with sourcing and vendor relationships.
FDD Citations:
- Item 8: "We have the right to require that all equipment, technology, inventory, supplies...be purchased only from vendors that we have expressly approved; and/or (c) be purchased only from a single source (which may include us or our affiliates) at the then-current price."
- Item 8: "We and our affiliates earn a profit on products and services we sell to you directly, and we and our affiliates receive rebates, administrative fees, commissions...from unaffiliated vendors."
Limited Information on Vendor Selection Criteria
Medium
Explanation:
- The FDD lacks details on the criteria used for vendor selection and approval. This lack of transparency makes it difficult to assess the fairness and competitiveness of vendor pricing and quality.
- Franchisees are unaware of the process for becoming an approved vendor, potentially hindering their ability to work with preferred local suppliers.
Potential Mitigations:
- Request specific information from the franchisor regarding vendor selection criteria, including quality standards, pricing policies, and any exclusivity arrangements.
- Inquire about the process for suggesting new vendors for approval.
- Discuss with existing franchisees their experiences with approved vendors and any challenges they have faced.
FDD Citations:
- Item 8: "To the extent that we establish specifications, require approval of vendors, or designate specific vendors for particular items, we will notify franchisees via the Operations Manual or otherwise."
Potential Impact of Washington State Referral Program Regulations
Medium
Explanation:
- Franchisees in Washington who participate in referral programs with financial incentives may need to register as franchise brokers, potentially adding complexity and cost to their operations.
- The FDD doesn't clarify the specific requirements or implications of this registration, creating uncertainty for potential franchisees in Washington.
Potential Mitigations:
- If operating in Washington, consult with legal counsel specializing in franchise law to understand the requirements for franchise broker registration and associated costs.
- Request clarification from the franchisor on how they will support franchisees in navigating these regulations.
FDD Citations:
- Item 19: "In Washington, Franchisees who receive financial incentives to refer franchise prospects to franchisors may be required to register as franchise brokers under the laws of Washington."
Varied Effective Dates and Pending Registrations Across States
Medium
Explanation:
- The FDD lists varying effective dates and pending registrations for different states, indicating potential inconsistencies in legal compliance and operational procedures across the franchise system.
- The "Pending" status for several states creates uncertainty for prospective franchisees in those locations.
Potential Mitigations:
- Confirm the current registration status of the FDD in your target state before signing any agreements.
- Inquire about the reasons for any pending registrations and the expected timeline for completion.
- Consult with legal counsel to understand the implications of operating in a state with a pending registration.
FDD Citations:
- State Effective Dates Section: Lists various effective dates and "Pending" status for multiple states.
Exhibit E Not Applicable in Washington
Low
Explanation:
- The absence of Exhibit E (Questionnaire) in Washington raises questions about the information gathering process for prospective franchisees in that state. While not necessarily a high risk, it creates a slight information asymmetry compared to other states.
Potential Mitigations:
- If operating in Washington, inquire about the alternative methods used by the franchisor to gather necessary information from prospective franchisees.
- Ensure all relevant questions covered in Exhibit E for other states are addressed during the due diligence process.
FDD Citations:
- Item 20: "Exhibit E to the Franchise Disclosure Document (Questionnaire to be Completed Before Executing Franchise Agreement) is not applicable in Washington."
Exit & Transfer Risks
3 risks identified
2
1
Washington State Law Superseding Franchise Agreement
Medium
Explanation:
- Washington's RCW 19.100.180 may override parts of the franchise agreement regarding termination and renewal, potentially impacting the franchisee's control and future prospects.
- Court decisions can also supersede the agreement, creating uncertainty and potential legal challenges.
Potential Mitigations:
- Carefully review RCW 19.100.180 and relevant case law with a Washington-licensed franchise attorney to understand potential conflicts with the franchise agreement.
- Negotiate with the franchisor to address any discrepancies or concerns arising from state law, ensuring alignment with Washington's legal framework.
FDD Citations:
- State Addendum, Item 2: "RCW 19.100.180 may supersede provisions in the franchise agreement...concerning your relationship with the franchisor, including in the areas of termination and renewal..."
Restrictions on Transfer Fees
Low
Explanation:
- Washington State limits transfer fees to the franchisor's reasonable costs, potentially reducing the franchisor's profit from transfers and impacting their incentive to facilitate them.
Potential Mitigations:
- Request a detailed breakdown of the transfer fee calculation from the franchisor to ensure compliance with Washington regulations.
- Consult with a franchise attorney to assess the reasonableness of the transfer fee in light of the franchisor's actual costs.
FDD Citations:
- State Addendum, Item 6: "Transfer fees are collectable to the extent that they reflect the franchisor’s reasonable estimated or actual costs in effecting a transfer."
Limitations on Non-Compete Covenants
Medium
Explanation:
- Washington law restricts enforceability of non-compete agreements for employees and independent contractors based on earnings thresholds, potentially limiting the franchisor's ability to protect its brand and trade secrets after termination or transfer.
Potential Mitigations:
- Review the non-compete provisions carefully with legal counsel to understand their enforceability in Washington State.
- Negotiate with the franchisor to tailor the non-compete agreement to comply with Washington law, focusing on protecting legitimate business interests without unduly restricting future opportunities.
FDD Citations:
- State Addendum, Item 14: "A noncompetition covenant is void and unenforceable against an employee...unless the employee’s earnings...exceed $100,000 per year..."
- Item 17, Section q: "Non-competition covenants during the term of the franchise...Section 14.1"
Operational & Brand Risks
7 risks identified
2
3
2
Mandatory Sourcing Restrictions
High
Explanation:
- DRYMedic mandates that franchisees purchase equipment, supplies, and services from approved vendors or a single source, potentially including the franchisor or its affiliates.
- This limits franchisees' flexibility to negotiate better prices or choose preferred suppliers, potentially impacting profitability.
- The franchisor and its affiliates profit from these mandated purchases, creating a potential conflict of interest.
Potential Mitigations:
- Carefully review Item 8 and all related agreements to fully understand the scope and implications of these restrictions.
- Compare prices offered by mandated vendors with market rates to assess potential cost disparities.
- Inquire about the franchisor's process for approving new vendors and the criteria used for selection.
FDD Citations:
- Item 8: "We have the right to require that all equipment...be purchased only from vendors that we have expressly approved; and/or (c) be purchased only from a single source (which may include us or our affiliates) at the then-current price."
- Item 8: "We and our affiliates earn a profit on products and services we sell to you directly, and we and our affiliates receive rebates...from unaffiliated vendors."
Dependence on Franchisor's Technology
Medium
Explanation:
- Franchisees are required to license and use the DASH software owned by a third party and provided through BuyMax, creating dependence on the franchisor's chosen technology.
- This can limit flexibility in adopting new technologies or integrating with other systems.
- Potential issues with software functionality, updates, or support could disrupt operations.
Potential Mitigations:
- Thoroughly review the Software User Agreement (Exhibit A) to understand the terms, costs, and limitations of the DASH software.
- Inquire about the software's features, functionality, and compatibility with other systems.
- Research alternative software options in the market to understand available choices if the mandated software proves inadequate.
FDD Citations:
- Item 8: "You must license from BuyMax and use in your Franchised Business the DASH software owned by a third party..."
- Item 8: "You are required to sign the Software User Agreement before you open your Franchised Business. A copy of the Software User Agreement is included in Exhibit A."
Mandatory Sales and Marketing Materials
Medium
Explanation:
- Franchisees must purchase certain sales and marketing materials and services from the franchisor or its affiliates.
- This restricts flexibility in tailoring marketing efforts to local market conditions and may lead to higher costs.
- The effectiveness of the mandated materials may vary across different markets.
Potential Mitigations:
- Request samples of the mandatory sales and marketing materials to assess their quality and suitability for your target market.
- Inquire about the cost of these materials and services and compare them with market rates.
- Negotiate with the franchisor for flexibility in adapting the materials to local market needs.
FDD Citations:
- Item 8: "You must also order certain sales and marketing materials and services from us or our affiliates."
Potential for Referral Program Compliance Issues (Washington)
Low
Explanation:
- In Washington, franchisees receiving financial incentives for referrals may need to register as franchise brokers.
- Failure to comply with this requirement could result in legal penalties.
Potential Mitigations:
- If operating in Washington and participating in a referral program, consult with legal counsel to determine if registration as a franchise broker is required.
- Ensure all referral activities comply with Washington state regulations.
FDD Citations:
- Item 19: "In Washington, Franchisees who receive financial incentives to refer franchise prospects to franchisors may be required to register as franchise brokers under the laws of Washington."
Changes to Purchasing Restrictions
Medium
Explanation:
- The franchisor reserves the right to impose additional purchasing restrictions at any time.
- This creates uncertainty about future costs and could impact profitability.
Potential Mitigations:
- Clarify with the franchisor the process for implementing new purchasing restrictions and the frequency of such changes.
- Negotiate for greater transparency and predictability regarding future purchasing requirements.
FDD Citations:
- Item 8: "The following specific restrictions...are in effect as of the issuance date of this disclosure document, but we can impose other restrictions at any time."
Equipment and Vehicle Outfitting Requirements
Low
Explanation:
- Franchisees are required to pay an Equipment and Vehicle Outfitting Fee, which covers specific equipment and vehicle modifications.
- This may limit flexibility in choosing equipment or vehicle types and could represent a significant upfront cost.
Potential Mitigations:
- Review the details of the Equipment and Vehicle Outfitting Fee to understand what is included and the rationale for the specified equipment and modifications.
- Compare the cost of the package with market rates for similar equipment and services.
FDD Citations:
- Item 8: "Items you must purchase from us or affiliates: Equipment and Vehicle Outfitting."
Potential Conflict of Interest with Franchisor/Affiliate Vendors
High
Explanation:
- The franchisor and its affiliates profit from sales to franchisees, creating a potential conflict of interest.
- This could incentivize the franchisor to prioritize its own profits over the best interests of the franchisees.
Potential Mitigations:
- Carefully analyze the pricing and terms offered by franchisor-affiliated vendors compared to market rates.
- Seek legal counsel to review the franchise agreement and related documents for potential conflicts of interest.
- Engage in open communication with the franchisor about any concerns regarding pricing or vendor relationships.
FDD Citations:
- Item 8: "We and our affiliates earn a profit on products and services we sell to you directly..."
Performance & ROI Risks
3 risks identified
2
1
Limited Sample Size for Performance Data
High
Explanation:
- Item 19's performance data is based on only 21 franchisees (35 territories) out of a total of 40 franchisees (67 territories). This small sample size may not accurately represent the potential range of outcomes for new franchisees.
- Excluding a significant number of franchisees (27 new territories, 3 ceased operations, 3 with incomplete data) further skews the presented data and limits its predictive value.
Potential Mitigations:
- Request the franchisor to provide detailed financial information for ALL franchisees, including those excluded from Item 19. Analyze the reasons for exclusions and assess their potential impact on your investment.
- Independently research industry benchmarks and compare them with the provided data to gain a broader perspective on potential performance.
- Consult with a financial advisor to evaluate the financial data and assess the potential return on investment based on a wider range of scenarios.
FDD Citations:
- Item 19: "As of December 31, 2024, we had 40 franchisees operating in 67 Territories. Tables 1 and 2 present information on 21 franchisees (representing 35 Territories) that were in operation for the entire 2024 fiscal year."
- Item 19: Mentions exclusions of several franchisees for various reasons.
Reliance on Franchisee-Reported Data
Medium
Explanation:
- The FDD states that the financial performance representations are based on information reported by franchisees. This self-reported data may lack independent verification and could be subject to inaccuracies or biases.
Potential Mitigations:
- Request audited financial statements from a selection of franchisees to verify the accuracy of the self-reported data.
- Interview existing franchisees to gain insights into their actual financial performance and compare their experiences with the data presented in Item 19.
FDD Citations:
- Item 19: "The financial information we utilized in preparing the financial performance representations in Tables 1 and 2 was based on information reported to us by franchisees."
No Assurance of Similar Performance
High
Explanation:
- The FDD explicitly states, "Some outlets have sold this amount. Your individual results may differ. There is no assurance that you’ll sell as much." This disclaimer highlights the inherent risk that a new franchisee's performance may deviate significantly from the presented data.
Potential Mitigations:
- Develop a realistic business plan based on conservative revenue projections and account for potential market variations and competitive pressures.
- Thoroughly research the local market demographics, competition, and demand for DRYMedic's services to assess the potential for success in your specific territory.
FDD Citations:
- Item 19: "Some outlets have sold this amount. Your individual results may differ. There is no assurance that you’ll sell as much."
FDD Documents by Year
Download and view official Franchise Disclosure Documents
FDD Year: 2025
Uploaded: 8/8/2025
FDD Year: 2024
Uploaded: 8/25/2025
FDD Documents
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