If the Franchise Agreement is not signed, is the initial Dryject franchise fee still due?
Dryject Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 5: INITIAL FEES]
Item 5 INITIAL FEES
Upon our signing the Franchise Agreement, you must pay to us an Initial Franchise Fee of $29,500. The Initial Franchise Fee is fully earned and non-refundable in consideration of administrative and other expenses incurred by us in entering into the Agreement and for our lost or deferred opportunity to enter into the Agreement with others. There is no financing available from us for the payment of the Initial Franchise Fee. The Initial Franchise Fee is uniform to all franchise owners.
[Item 8: BUSINESS RELATIONSHIP]
ADDENDUM TO FRANCHISE DISCLOSURE DOCUMENT FOR STATE OF MARYLAND
Item 5, "Initial Fee" shall be amended by the addition of the following paragraph:
Based upon the franchisor's financial condition, the Maryland Securities Commissioner has required a financial assurance. Therefore, all initial fees and payments owed by franchisees shall be deferred until the franchisor completes its pre-opening obligations under the franchise agreement.
- Item 5 "Initial Fee" is amended by the addition of the following paragraph:
"All initial fees and payments shall be deferred until such time as the franchisor has fulfilled its initial pre-opening obligations and the franchise is open for business."
ILLINOIS ADDENDUM TO FRANCHISE AGREEMENT
Notwithstanding the foregoing, the Illinois Attorney General's Office requires Us to defer payment of the initial franchise fee owed by You to Us until We have completed Our pre-opening obligations under this Agreement and You have commenced doing business.
Source: Item 5 — INITIAL FEES (FDD page 13)
What This Means (2025 FDD)
According to Dryject's 2025 Franchise Disclosure Document, the standard procedure is that the initial franchise fee of $29,500 is due upon signing the Franchise Agreement. However, there are exceptions to this rule depending on the state where the franchise is located.
For franchisees in Maryland and Minnesota, the initial fees and payments are deferred until Dryject has fulfilled its pre-opening obligations and the franchise is open for business. This means that franchisees in these states would not be required to pay the initial franchise fee until these conditions are met, regardless of whether the Franchise Agreement has been signed.
Furthermore, an addendum to the Franchise Agreement notes that for Illinois franchisees, the payment of the initial franchise fee is deferred until Dryject has completed its pre-opening obligations and the franchisee has commenced business. This suggests that in Illinois, the fee is not due simply upon signing the agreement but upon fulfilling certain pre-opening obligations and starting operations. It is important to note that the standard initial franchise fee is $29,500, but this fee may be subject to change.
In summary, while the standard practice is for the initial franchise fee to be due upon signing the Franchise Agreement, franchisees should be aware of state-specific addenda that may defer this payment until certain pre-opening obligations are met or the business is open. Prospective franchisees should carefully review the FDD and any state-specific addenda to understand the specific payment terms applicable to their situation and consult with Dryject directly to confirm the current policy.