If a Dryject franchisee suffers an assignment or transfer by operation of law, is this permitted?
Dryject Franchise · 2025 FDDAnswer from 2025 FDD Document
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, a transfer, whether voluntary or involuntary, is covered under the agreement. The term "transfer" includes various forms of disposition of interest in the agreement, the franchisee entity, the franchised business, or its assets. This encompasses not only voluntary actions like sales or gifts but also involuntary assignments. Any transfer of ownership, possession, or control of the Dryject business or its assets requires a corresponding transfer of the franchise agreement, which must comply with the terms outlined in the agreement.
This means that if a Dryject franchisee experiences a transfer by operation of law (e.g., due to death, bankruptcy, or court order), it is still considered a transfer subject to the conditions and limitations specified in the franchise agreement. The franchisee or their estate must adhere to the transfer requirements outlined in the agreement.
Dryject retains significant control over who becomes a franchisee, even in cases of involuntary transfer. The prospective transferee must meet Dryject's requirements for new franchisees. This includes demonstrating good reputation, character, experience, business acumen, operational ability, and financial strength. Dryject's consent to the transfer remains a subjective determination, ensuring that any new franchisee aligns with their standards and protects the brand's image and system.