Does the Dryject franchise agreement automatically terminate if a franchisee operates a similar business in their territory without consent?
Dryject Franchise · 2025 FDDAnswer from 2025 FDD Document
ies of DRYJECT SYSTEM and the confidentiality and value of Franchisor's Trade Secrets, and in consideration for the disclosure to Trainee of Franchisor's Trade Secrets, Trainee further undertakes and covenants that, during the time he is employed by Franchisee, he will not:
- (a) Directly or indirectly, for himself or through, on behalf of or in conjunction with any person, partnership or business entity, engage in or acquire any financial or beneficial interest in (including interest in business entities, partnerships, trusts, unincorporated associations or joint ventures), advise, help or make loans to any entity involved in business which is the same as or similar to that conducted by DRYJECT which Business is, or is intended to be located, within the United States; or
- (b) Divert or attempt to divert, directly or indirectly, any business, business opportunity or customer of Franchisee's Business(s) to any competitor.
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Source: Item 8 — BUSINESS RELATIONSHIP (FDD pages 68–229)
What This Means (2025 FDD)
According to the 2025 Dryject Franchise Disclosure Document, operating a similar business could potentially lead to the termination of the franchise agreement, but it does not specify that termination is automatic. The agreement states that Dryject may seek injunctive relief and has the right to terminate the Franchise Agreement if a franchisee breaches the agreement.
The FDD states that franchisees cannot engage in a business that is the same as or similar to Dryject within the United States, either directly or indirectly. This restriction applies to the franchisee themselves, as well as any entity they have a financial interest in. Additionally, franchisees are prohibited from diverting business opportunities or customers to any competitor.
Furthermore, the FDD indicates that in the event of a breach of the agreement, Dryject would be irreparably injured and without an adequate remedy at law. Therefore, Dryject is entitled to enforce the provisions of the agreement and may seek a temporary and/or permanent injunction and a decree for the specific performance of the terms of the agreement, in addition to any other remedies available at law or in equity, including the right to terminate the Franchise Agreement, without being required to furnish a bond or other security. This suggests that while Dryject has the right to terminate the agreement, they may also pursue other legal remedies.