Is a Dryject franchisee required to assign accounts receivable to the franchisor for collection?
Dryject Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 8: BUSINESS RELATIONSHIP]
- (x) Assign any and all accounts receivable to Us for collection. In connection therewith You hereby appoint Us as attorney-in-fact to engage in such collection activities following the termination or expiration of this Agreement and You specifically undertake to refrain from engaging in any such collection activities upon termination or expiration. We agree to employ good faith efforts, including, where appropriate in Our sole and exclusive judgment, the commencement of legal proceedings, to collect such accounts receivable. Nothing contained herein shall be construed or deemed to impose any duty or obligation upon Us to collect such accounts receivable and, if all or a portion of such accounts receivable are not collected by Us, You release and waive any claims thereto against Us. If We are successful in collecting all or a part of such accounts receivable, We shall remit to You such sums collected after first deducting any and all monies owed to Us; after deducting the pro rata cost of servicing the customer(s) with respect to whom the receivables were collected; and, after further deducting Our costs of collection; and,
- (xi) Immediately refrain from engaging in any and all contacts with customers or former customers of the Franchised Business, whether with respect to collection of accounts receivable, to provide services to such customers or former customers pursuant to any business conducted by You, whether or not similar to the Franchised Business, or for any other purpose whatsoever.
Source: Item 8 — BUSINESS RELATIONSHIP (FDD pages 68–229)
What This Means (2025 FDD)
According to the 2025 Dryject Franchise Disclosure Document, a franchisee is required to assign accounts receivable to Dryject for collection under specific circumstances. Specifically, this requirement comes into effect following the termination or expiration of the Franchise Agreement.
Dryject, acting as the franchisee's attorney-in-fact, will then undertake collection activities. While Dryject commits to employing good faith efforts in collection, including potential legal proceedings, it is not obligated to collect the receivables, and the franchisee waives any claims against Dryject if the receivables are not fully recovered.
If Dryject successfully collects the receivables, the franchisee will receive the collected sums, but not before Dryject deducts any monies owed to them, the pro rata cost of servicing the customer related to the receivables, and Dryject's collection costs. Furthermore, upon termination or expiration of the agreement, the franchisee must cease all contact with customers or former customers of the franchised business, including any activities related to collecting accounts receivable.