What fees are Dryject required to pay from the gross revenues during a step-in period?
Dryject Franchise · 2025 FDDAnswer from 2025 FDD Document
- (b) During a step-in period, We will maintain in a separate account, all Gross Revenues of the Franchised Business. From that account We will pay all expenses of the Franchised Business, which will include the Royalty Service Fee, all Marketing Fund contributions or payments, and reasonable compensation and expenses for Our representatives. If these step-in rights are exercised, You agree to hold Us harmless and hold harmless Our representatives for all actions or omissions which occur during the course of the temporary operation. You agree to pay Our reasonable attorneys' fees and costs which might arise from the exercise of these step-in rights. Nothing in this Section 33 will prevent Us from exercising any other rights which We may have under this Agreement, including the right to terminate the Agreement.
Source: Item 8 — BUSINESS RELATIONSHIP (FDD pages 68–229)
What This Means (2025 FDD)
According to Dryject's 2025 Franchise Disclosure Document, during a step-in period, Dryject will maintain all Gross Revenues of the Franchised Business in a separate account. From this account, Dryject will pay all expenses of the Franchised Business. These expenses specifically include the Royalty Service Fee, all Marketing Fund contributions or payments, and reasonable compensation and expenses for Dryject's representatives.
This means that if Dryject exercises its right to step in and operate a franchise due to the franchisee's default or inability to operate the business, the gross revenues generated during that period will be used to cover the ongoing costs of the business. This includes not only the standard Royalty Service Fee and Marketing Fund contributions but also the compensation for Dryject's representatives managing the business during the step-in period.
It is important to note that the franchisee is responsible for Dryject's reasonable attorneys' fees and costs arising from the exercise of these step-in rights. This arrangement ensures that Dryject can maintain the integrity of the brand and system while covering the necessary expenses during the period they are managing the franchise. The franchisee will not have access to the gross revenues during this time, as they are used to cover the business's operational costs and fees owed to Dryject.