What is the consequence if a DryJect franchisee business entity is not newly formed?
Dryject Franchise · 2025 FDDAnswer from 2025 FDD Document
ill actively and substantially participate personally in the beneficial ownership and management of the DryJect Franchised Business.
- (b) In the event You are a business entity (including but not limited to a corporation, a limited liability corporation, a partnership, a limited liability partnership, a trust), in addition to being newly formed, You must complete and sign the Principal Owner's Statement attached to this Agreement as Addendum D and each individual with an ownership interest in You must also sign Addendum D. Further, You represent, warrant and covenant that:
- (i) You are newly formed and duly organized and validly exist under the laws of the state in which You were formed;
- (ii) You are duly qualified and are authorized to do business in each jurisdiction in which Your business activities or the nature of the properties owned by You require such qualification;
- (iii) The execution of and transactions contemplated by this Agreement are within Your powers;
- (iv) The ownership interests in You are accurately and fully listed in Addendum D;
- (v) Each and every person with a twenty percent (20%) or greater ownership interest in You shall sign the Guaranty Agreement attached to this Agreement as Addendum C and You shall provide the original signed Guaranty Agreement to Us;
Source: Item 8 — BUSINESS RELATIONSHIP (FDD pages 68–229)
What This Means (2025 FDD)
According to DryJect's 2025 Franchise Disclosure Document, if a franchisee is a business entity, it is required to be newly formed. Specifically, the franchisee must represent, warrant, and covenant that it is newly formed, duly organized, and validly exists under the laws of the state in which it was formed.
This requirement ensures that the business entity's sole purpose is the development, ownership, operation, and maintenance of the DryJect franchised business. This restriction helps DryJect maintain control over the franchise and ensures that the franchisee is fully dedicated to the DryJect business.
Furthermore, the franchisee must agree not to issue any additional stock, membership, or interests in the entity without DryJect's prior written consent. This provision, along with the requirement for new formation, allows DryJect to carefully monitor and approve any changes in ownership or control of the franchisee entity, safeguarding the DryJect brand and system.