If a Dryject franchisee is not an individual, do the assignment terms apply to changes in ownership or management control?
Dryject Franchise · 2025 FDDAnswer from 2025 FDD Document
If You are not an individual, the terms of this Section and of Section 31 hereof, shall also be deemed to apply to any management agreement, sale, resale, pledge, assignment, transfer or encumbrance of voting stock of, or other ownership interest in You which would, alone or together with other related, previous, simultaneous or proposed transfers, result in a change of ownership or management "control" of You.
As used in this Agreement, the term "transfer" includes Your (or an Owner's) voluntary, involuntary, direct or indirect, assignment, sale, gift, or other disposition of any interest in (1) this Agreement, (2) the Franchisee entity, (3) the Franchised Business governed by this Agreement, or (4) all or a substantial portion of the assets of the Franchised Business. It also includes an assignment of day-to-day operational responsibilities for the Franchised Business pursuant to an operating agreement or otherwise. A transfer of the Franchised Business' ownership, possession,
or control, or all or a substantial portion of Your assets, may be made only with a transfer of this Agreement which complies with the terms of this Agreement.
Source: Item 8 — BUSINESS RELATIONSHIP (FDD pages 68–229)
What This Means (2025 FDD)
According to Dryject's 2025 Franchise Disclosure Document, if the franchisee is not an individual, the assignment terms outlined in Section 28 and Section 31 of the franchise agreement apply to changes in ownership or management control. Specifically, these terms are applicable to any management agreement, sale, resale, pledge, assignment, transfer, or encumbrance of voting stock or other ownership interest in the franchisee entity. This includes changes that, alone or combined with other transfers, result in a change of ownership or management control.
For a prospective Dryject franchisee, this means that if the franchise is owned by a corporation, LLC, partnership, or other business entity, any significant change in the ownership structure or management could trigger the assignment provisions of the franchise agreement. This is designed to ensure that Dryject maintains control over who is operating its franchises and that any new owners or managers meet their standards.
The term "transfer" is broadly defined to include both voluntary and involuntary actions, such as sales, gifts, or other dispositions of interest in the franchise agreement, the franchisee entity, the franchised business, or its assets. It also covers the assignment of day-to-day operational responsibilities. Any transfer of ownership, possession, or control of the business or its assets must be accompanied by a transfer of the franchise agreement that complies with the agreement's terms.
This provision is important for potential franchisees to understand, as it restricts their ability to freely transfer ownership or management without Dryject's approval. Franchisees need to be aware of these restrictions when structuring their business and planning for future changes in ownership or management. Failure to comply with these terms could result in a breach of the franchise agreement.