How does Dryject evaluate its uncertain tax positions?

According to Dryject's 2025 Franchise Disclosure Document, the company evaluates its uncertain tax positions to determine if a loss contingency should be recognized. Dryject recognizes a loss contingency when it is probable that a liability has been incurred as of the date of the financial statements, and the amount of the loss can be reasonably estimated. This involves management's judgment regarding the likely outcome of each uncertain tax position.

The FDD states that the amount recognized is subject to estimation and management judgment. This means that the actual amount ultimately sustained for an individual uncertain tax position, or for all uncertain tax positions in the aggregate, could differ from the amount initially recognized. As of December 31, 2024, Dryject did not recognize any liability on uncertain tax positions.

For a prospective Dryject franchisee, this indicates that Dryject is aware of its tax obligations and takes steps to assess potential risks associated with uncertain tax positions. However, it's important to note that the evaluation involves estimates and judgment, and the actual outcome could vary. Franchisees should be aware that while Dryject itself may not be a taxpaying entity, the member's income taxes are computed on their total income from all sources. Therefore, franchisees should consult with their own tax advisor to understand the tax implications of investing in a Dryject franchise.