If Dryject exercises its step-in rights, what does the franchisee authorize Dryject or its designee to do?
Dryject Franchise · 2025 FDDAnswer from 2025 FDD Document
- (a) If a material default under this Agreement occurs and remains uncured, or is not subject to cure, or if Your actions jeopardize the integrity of the Marks or System, then You authorize Us or Our designee to operate the Franchised Business for as long as, in Our reasonable judgment, it is necessary or practical. You acknowledge that this right to step-in is necessary to preserve the value and integrity of the Marks and System. Even if We exercise this right to step in, You agree that We do not lose or waive a right to exercise any other rights or remedies which We may have legally under this Agreement. Among the reasons We may act under these step-in rights are:
- (i) We reasonably determine that You are unable to operate the Franchised Business because You are absent or incapacitated because of illness, accident, injury or death;
- (ii) You have not paid Your monetary obligations to Us or others when they are due;
- (iii) You have not removed non-consensual liens or encumbrances which have been placed against the Franchised Business; or,
- (iv) We determine that material operational problems require that We operate the Franchised Business for a period of time.
- (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, if a franchisee is in material default of their agreement, has an uncured default, or jeopardizes the integrity of Dryject's trademarks or system, the franchisee authorizes Dryject or its designee to operate the franchised business. This authorization remains in effect for as long as Dryject deems necessary or practical to address the issue. Dryject states that this right is essential to protect the value and integrity of its brand and operational system. Even with the step-in rights exercised, Dryject retains all other legal rights and remedies available under the agreement.
Dryject may exercise these step-in rights if the franchisee is absent or incapacitated due to illness, accident, injury, or death, or if the franchisee has not paid their monetary obligations to Dryject or others when due. Additional reasons for Dryject to step in include the franchisee's failure to remove non-consensual liens or encumbrances against the business, or if Dryject determines that material operational problems necessitate their temporary operation of the franchise.
During the step-in period, Dryject will manage all gross revenues of the franchised business in a separate account. From this account, Dryject will cover all business expenses, including the Royalty Service Fee, Marketing Fund contributions, and reasonable compensation and expenses for Dryject's representatives. The franchisee agrees to hold Dryject and its representatives harmless for any actions or omissions during this temporary operation and is responsible for Dryject's reasonable attorney's fees and costs arising from the exercise of these step-in rights. It is important to note that these step-in rights do not prevent Dryject from exercising any other rights they may have under the agreement, including termination.