What is the consequence if a DryJect franchisee business entity issues additional stock without DryJect's consent?

According to DryJect's 2025 Franchise Disclosure Document, if a franchisee operates as a business entity, they are prohibited from issuing additional stock, membership, or interests in the entity without DryJect's prior written consent. This restriction also applies to any individual with an ownership interest in the entity who wishes to transfer, assign, or pledge their ownership interest. The FDD states that DryJect's consent will not be unreasonably withheld. To ensure compliance, a legend outlining this transfer restriction must be included in the business entity's organizational and governing documents, as well as other relevant documents like certificates and stocks.

DryJect retains the right to set conditions when granting consent for the issuance of additional stock or transfer of ownership. These conditions are not explicitly detailed in the provided excerpt, but the document implies that DryJect can impose requirements to protect its interests and maintain control over the franchise system. This provision allows DryJect to carefully vet potential new owners or stakeholders to ensure they meet the brand's standards and are committed to upholding the integrity of the franchise.

For a prospective DryJect franchisee, this restriction means that any changes to the ownership structure of their business entity require approval from DryJect. This could potentially delay or complicate efforts to raise capital or bring in new partners. However, the FDD also states that DryJect's consent will not be unreasonably withheld, which provides some assurance that legitimate business needs will be accommodated. A prospective franchisee should discuss with DryJect what specific conditions or requirements they might impose when considering such requests.