Does Dryject have the discretion to apply my payments to past due amounts, regardless of my designation?

According to Dryject's 2025 Franchise Disclosure Document, Dryject has the sole discretion to apply any payments made by a franchisee to any past due amounts owed. This includes amounts for Royalty Service Fees, Marketing Fund Fees, purchases from Dryject or its subsidiaries/affiliates, interest, or any other form of debt. This applies regardless of any specific designation the franchisee might make regarding how the payment should be applied.

This provision gives Dryject significant control over the allocation of payments, which could impact a franchisee's financial standing with the company. For example, if a franchisee designates a payment to cover current royalties but has outstanding debt from purchases, Dryject can choose to apply the payment to the older debt first. This could leave the franchisee technically delinquent on their royalty payments, potentially triggering late fees or other penalties.

It is also important to note that the Dryject franchise agreement does not allow a franchisee to withhold payments for any reason, even if they believe Dryject is not fulfilling its obligations. Any amounts withheld will be considered unpaid. Franchisees are also required to reimburse Dryject for any taxes Dryject has to pay due to the franchisee's operation or payments made to Dryject.

Prospective franchisees should carefully consider this clause and its potential implications for their cash flow management and relationship with Dryject. Understanding how Dryject allocates payments and the inability to withhold payments is crucial for maintaining a good financial standing and avoiding potential disputes.