What constitutes a failure to comply with System Standards for a Dryject franchise, leading to a potential breach?
Dryject Franchise · 2025 FDDAnswer from 2025 FDD Document
You shall be in default under this Agreement for failure to comply with any of the requirements imposed by the Agreement, or for failure to carry out the terms of this Agreement in good faith.
Such defaults include, but are not limited to:
(i) A failure by You to remit any payments when due under this Agreement;
(ii) A failure by You to establish, equip, maintain, or update the Franchised Business in accordance with Our System Standards;
(iii) A failure by You to submit to Us financial reports or other information required under this Agreement, or a failure to allow reasonable access to Your records within the time periods required by this Agreement;
(iv) A failure by You to operate the Franchised Business in accordance with Our Operations Manual or other manuals, or a failure by You to use products, methods, equipment or suppliers which conform to Our System Standards, or Your failure to maintain Our System Standards of quality service in the operation of the Franchised Business;
(v) A failure by You to obtain Our prior written approval or consent as expressly required by this Agreement;
(vi) A failure by You to accurately or completely record all sales made in, upon or from the Franchised Business at the time of sale;
(vii) A breach by You of any other covenant, term, or provision of this Agreement;
(viii) A failure by You to open the Franchised Business within one hundred and eighty (180) days of the execution of this Agreement;
(ix) A failure by You to comply with any of Your agreements with any third parties as related to the Franchised Business; or,
(x) A failure by You to consistently pay the debts of the Franchised Business as they become due.
(c) In the event You are delivered two (2) or more notices of Material Breach from Us within a twelve (12) month period pertaining to any one (1) or more of the foregoing events of default whether or not cured after notice, during the initial Term or any renewal terms of this Agreement, We shall have the right to terminate this Agreement.
The effective date of any such termination notice under this Subsection shall be upon the expiration of Your receipt of three (3) days written notice to that effect, or such longer period as may be required by law.
Source: Item 8 — BUSINESS RELATIONSHIP (FDD pages 68–229)
What This Means (2025 FDD)
According to Dryject's 2025 Franchise Disclosure Document, a franchisee can be in default of their agreement for failing to comply with the requirements of the agreement or failing to carry out the terms in good faith. This includes specific instances related to System Standards. These System Standards are defined as the mandatory specifications, standards, operating procedures, and rules that Dryject periodically prescribes for the development and operation of its franchised businesses. These standards may be modified over time, and franchisees are responsible for operating in full compliance with them.
Several actions can lead to a default related to System Standards. These include failing to establish, equip, maintain, or update the franchised business according to Dryject's System Standards. It also includes failing to operate the franchised business according to the Operations Manual or using products, methods, equipment, or suppliers that do not conform to Dryject's System Standards. Furthermore, a failure to maintain Dryject's System Standards of quality service in the operation of the franchised business can also result in a default.
In practical terms, this means a Dryject franchisee must adhere to all guidelines provided in the Operations Manual and any updates to it. They must use approved suppliers and maintain the quality of service expected by Dryject. Failure to do so can lead to notices of material breach, and multiple breaches within a twelve-month period can result in the termination of the franchise agreement. It is important for prospective franchisees to understand and be prepared to consistently meet these standards to avoid potential defaults and maintain a successful Dryject franchise.