What is the dependency between the Dryject franchisee's failure to open the Franchised Business on time and the termination of the agreement?
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:
- (viii) A failure by You to open the Franchised Business within one hundred and eighty (180) days of the execution of this Agreement;
"In the event Franchise Owner does not commence operating the Franchised Business within the time period set forth herein, this Agreement shall be deemed terminated, and the Initial Franchise Fee may be kept by the Company to reimburse itself for lost opportunity costs, costs and/or expenses."
With respect to franchises governed by Minnesota Law, DryJect® will comply with Minn. Stat. Sec. 80c.14, subds. 3, 4, and 5, which require, except in certain specified cases, that Franchise Owner be given 90 days' notice of termination (with 60 days to cure) and 180 days' notice for nonrenewal of the franchise agreement and that consent to the transfer of the franchise will not be unreasonably withheld.
"To the extent that the provision of §32 regarding termination are inconsistent with requirements of the Wisconsin Fair Dealership Law (which, among other things, grants Franchise Owner the right, in most circumstances to 90 days prior written notice of termination and 60 days within which to remedy any claimed deficiencies), said termination provisions will be superseded by the requirements of the Wisconsin Fair Dealership Law and will have no force or effect."
Source: Item 8 — BUSINESS RELATIONSHIP (FDD pages 68–229)
What This Means (2025 FDD)
According to Dryject's 2025 Franchise Disclosure Document, a franchisee's failure to open their franchised business within a specified timeframe can lead to the termination of the franchise agreement. Specifically, if a Dryject franchisee does not open the Franchised Business within 180 days of the execution of the Franchise Agreement, it is considered a default, which can result in the termination of the agreement by Dryject.
However, this general rule is modified by an amendment included in the Rider to the agreement. This amendment states that if the Franchise Owner does not commence operating the Franchised Business within the agreed time, the agreement will be terminated, and Dryject may retain the initial franchise fee to cover lost opportunity costs and expenses. This clause supersedes any conflicting provisions in the original agreement, emphasizing the importance of timely commencement of operations.
It's important to note that these termination clauses may be superseded by state laws in certain jurisdictions. For example, in Wisconsin, the Wisconsin Fair Dealership Law may grant the franchisee rights to prior written notice of termination and an opportunity to remedy any deficiencies, potentially overriding the standard termination provisions in the Dryject agreement. Similarly, Minnesota law requires specific notice periods for termination and nonrenewal, which Dryject will comply with for franchises governed by Minnesota law.
Prospective Dryject franchisees should carefully review these termination clauses and any applicable state laws to understand their rights and obligations regarding the timely opening and operation of their franchised business. They should also seek clarification from Dryject regarding any potential extensions or waivers of the opening deadline and the specific conditions under which the initial franchise fee may be retained in the event of termination.