Why does Dryject defer the collection of initial fees from California franchisees?

According to Dryject's 2025 Franchise Disclosure Document, the collection of initial fees from California franchisees is deferred due to a determination by the California Department of Financial Protection and Innovation. The Department has determined that Dryject has not adequately demonstrated that it is sufficiently capitalized and/or that Dryject relies on franchise fees to fund its operations. As a result, the Commissioner has imposed a fee deferral condition.

This condition mandates that Dryject must postpone the collection of all initial fees from franchisees in California. This deferral remains in effect until Dryject has fulfilled all of its pre-opening obligations to the franchisee. Furthermore, the franchisee must be open for business before Dryject can collect these initial fees.

For a prospective Dryject franchisee in California, this deferral of initial fees represents a significant benefit. It reduces the upfront financial burden and risk, as the franchisee does not have to pay the initial fees until Dryject has provided the necessary support and the business is operational. This arrangement aligns the franchisor's interests with the franchisee's success, as Dryject is incentivized to ensure the franchisee's timely and successful launch.

It is important for potential franchisees to understand the specific pre-opening obligations that Dryject must fulfill before collecting the fees. These obligations should be clearly outlined in the franchise agreement and related documents. Franchisees should also confirm the criteria for determining when the business is considered "open" for business, as this triggers the payment of the initial fees.