If Dryject does not collect all accounts receivable, does the franchisee have any claims against Dryject?
Dryject Franchise · 2025 FDDAnswer from 2025 FDD Document
- (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,
Source: Item 8 — BUSINESS RELATIONSHIP (FDD pages 68–229)
What This Means (2025 FDD)
According to the 2025 Dryject Franchise Disclosure Document, franchisees are required to assign all accounts receivable to Dryject for collection. Dryject agrees to employ good faith efforts to collect these receivables, including legal proceedings if deemed appropriate. However, Dryject does not guarantee the collection of all accounts receivable.
Specifically, the FDD states that franchisees release and waive any claims against Dryject if Dryject is unable to collect all or a portion of the accounts receivable. If Dryject is successful in collecting any of the receivables, they will remit the collected sums to the franchisee after deducting any monies owed to them, the pro rata cost of servicing the customer, and their costs of collection.
This arrangement means that Dryject franchisees bear the risk of uncollectible accounts receivable once they are assigned to Dryject. While Dryject is obligated to make good faith efforts to collect, the franchisee has no recourse against Dryject if these efforts are unsuccessful. This is a significant point for prospective franchisees to consider, as it directly impacts their potential revenue and financial stability. Franchisees should carefully evaluate the potential for uncollectible accounts in their market and factor this risk into their financial projections.