What must a Dryject franchisee obtain before selling or transferring the franchise agreement?
Dryject Franchise · 2025 FDDAnswer from 2025 FDD Document
- (c) You acknowledge and agree that the restrictions on transfer imposed herein are reasonable and are necessary to protect Our Franchise System; Our trade secrets and operating procedures; Our general high reputation and image; the Licensed Rights; as well as You and Our other DryJect franchisees. Any assignment or transfer permitted by this Agreement shall not be effective until We receive a completely executed copy of all transfer documents and consent to such transfer in writing. Under no circumstances will You have a right to transfer under this Agreement before the Franchised Business has commenced operations.
- (d) Your performance is of vital importance to the market position and Our overall image, and there are many subjective factors that comprise the process by which We select a suitable franchisee. Our consent to a transfer or assignment by You of the Franchise and Franchised Business shall, in addition to the other restrictions and requirements herein noted, remain a
subjective determination and shall consider, but not be limited to, whether:
(i) All obligations of Yours under this Agreement and all other franchise documents, and the relationship created under those agreements are being assumed by the transferee;
(ii) All ascertained debts of Yours to Us and Our affiliates have been paid;
(iii) You, at the time of the request to transfer and as of the date of transfer, are not in default under this Agreement or any other franchise agreement;
(iv) Except for other DryJect franchisees, the proposed transferee does not operate or participate in an entity that operates a franchise, license, or other business offering products and/or services similar to those offered by the Franchised Business;
(v) The proposed transferee meets all of Our requirements for new franchisees, including, but not limited to, good reputation and character, experience, business acumen, operational ability, financial strength and stability, willingness and ability to devote full time and best efforts to the operation of the Franchised Business and other business considerations as We may reasonably apply in evaluating new franchisees.
We must be provided all information about the proposed transferee as We may reasonably require;
(vi) We shall have the right to approve the material terms and conditions of the transfer, including, without limitation, the right to confirm that the price and terms of payment are not so burdensome as to affect adversely the transferee's operation of the Franchised Business;
(vii) The proposed transferee executes or, in appropriate circumstances, causes all necessary parties to execute Our then-current standard form of franchise agreement (provided that such execution will not serve to extend the then remaining Term of the franchise) and such other then-current ancillary agreements being required by Us of new franchisees on the date of transfer;
(viii) You, except to the extent prohibited by applicable law, have executed a general release of any and all claims against Us and Our subsidiaries and affiliates, and Our respective officers, directors, agents and employees;
(ix) You have paid to Us a non-refundable Transfer Fee equal to forty percent (40%) of the then-current Initial Franchise Fee being charged to new franchisees to cover Our reasonable costs in effecting the transfer;
(x) If You are providing financing to the proposed transferee for any part of the purchase price, You have agreed that all of the proposed transferee's obligations under promissory notes, agreements or security interests reserved in the Franchised Business are subordinate to the proposed transferee's obligation to pay fees and other amounts due to Us and otherwise to comply with the franchise agreement; and,
Source: Item 8 — BUSINESS RELATIONSHIP (FDD pages 68–229)
What This Means (2025 FDD)
According to the 2025 Dryject FDD, a franchisee must obtain Dryject's written consent before any assignment or transfer of the franchise agreement can be considered effective. This consent is not guaranteed and is subject to Dryject's subjective determination based on several factors.
Dryject will assess whether the proposed transferee meets the requirements for new franchisees, including factors like good reputation, character, experience, business acumen, operational ability, and financial stability. The transferee must also assume all of the franchisee's obligations under the franchise agreement and related documents, and all debts to Dryject and its affiliates must be paid. The franchisee must not be in default of the agreement at the time of the transfer request or on the transfer date. Furthermore, unless the proposed transferee is another Dryject franchisee, they cannot be involved in a business that offers similar products or services.
Dryject also requires that the franchisee provide all reasonably requested information about the proposed transferee. Dryject has the right to approve the material terms of the transfer, ensuring that the price and payment terms do not negatively impact the transferee's ability to operate the Dryject business. The transferee must execute Dryject's current standard franchise agreement and any other required ancillary agreements. The franchisee must also execute a general release of claims against Dryject and its affiliates, to the extent permitted by law.
Finally, the franchisee must pay Dryject a non-refundable transfer fee equal to 40% of the then-current initial franchise fee. If the franchisee is providing financing to the transferee, the transferee's obligations to Dryject must take precedence over any financing agreements. These conditions ensure that any transfer maintains the standards and financial stability of the Dryject franchise system.