If a Dryject franchisee is arrested, does that automatically trigger a breach of the franchise agreement?
Dryject Franchise · 2025 FDDAnswer from 2025 FDD Document
anchised Business' premises, which We reasonably believe presents health and/or safety concerns for the Franchised Business' customers or employees;
- (xv) Engage in any act(s) that is so dishonest, untrustworthy, self-dealing, and/or fraudulent, that it goes to the essence of the Franchise Agreement and/or frustrates one of the principal purposes of the Franchise Agreement and/or irreparably damages the trust between Us and You;
- (xvi) Commit a material breach that cannot be cured; or,
- (xvii) If, without Our prior written consent, You or persons controlling, controlled by, or under common control with You shall have any interest, direct or indirect, in the ownership or operation of any business engaged in the sale of similar or other related products or services within Your Designated Territory, or in any business, regardless of where located, that looks like, copies, or imitates any DryJect business, or operates in a manner tending to have such effect.
- (e) Notwithstanding the foregoing provisions of this Section, You shall be in breach under this Agreement and all rights granted under this Agreement will automatically terminate without notice to You, if You do any of the following:
- (i) Make an assignment for the benefit of creditors or an admission of Your inability to pay Your obligations as they become due;
Source: Item 8 — BUSINESS RELATIONSHIP (FDD pages 68–229)
What This Means (2025 FDD)
According to the 2025 Dryject Franchise Disclosure Document, an arrest does not automatically trigger a breach of the franchise agreement. However, the FDD does state that Dryject can consider a franchisee in breach of the agreement if the franchisee engages in dishonest, untrustworthy, self-dealing, and/or fraudulent acts.
Specifically, section (xv) states that if a franchisee engages in any act(s) that is so dishonest, untrustworthy, self-dealing, and/or fraudulent, that it goes to the essence of the Franchise Agreement and/or frustrates one of the principal purposes of the Franchise Agreement and/or irreparably damages the trust between Dryject and the franchisee, it can be considered a breach. This clause provides Dryject with some discretion to determine if certain actions, including those that lead to an arrest, constitute a breach based on the specifics of the situation.
Additionally, section (e) outlines specific conditions that will automatically terminate the agreement without notice, such as making an assignment for the benefit of creditors or filing for bankruptcy. However, an arrest is not listed as one of these conditions. Therefore, while an arrest itself may not automatically terminate the agreement, the underlying actions that led to the arrest could potentially be grounds for termination if they fall under the categories of dishonest, untrustworthy, self-dealing, and/or fraudulent acts as determined by Dryject.