How is Item 5, 'Initial Fees,' amended for Dryject franchisees in California?
Dryject Franchise · 2025 FDDAnswer from 2025 FDD Document
EXHIBIT J SPECIFIC STATE ADDENDA TO DISCLOSURE DOCUMENT
ADDENDUM TO THE DISCLOSURE DOCUMENT REQUIRED BY THE STATE OF CALIFORNIA
The registration of this franchise offering by the California Department of Financial Protection and Innovation does not constitute approval, recommendation, or endorsement by the commissioner.
Item 5 'Initial Fees" shall be amended by the addition of the following paragraph: The Department has determined that we, the franchisor, have not demonstrated we are adequately capitalized and/or that we must rely on franchise fees to fund our operations. The Commissioner has imposed a fee deferral condition, which requires that we defer the collection of all initial fees from California franchisees until we have completed all of our pre-opening obligations and you are open for business.
Source: Item 8 — BUSINESS RELATIONSHIP (FDD pages 68–229)
What This Means (2025 FDD)
According to Dryject's 2025 Franchise Disclosure Document, Item 5, concerning 'Initial Fees,' is specifically amended for franchisees in California. Due to the franchisor's capitalization status, the California Department of Financial Protection and Innovation requires Dryject to defer the collection of all initial fees from California franchisees. This deferral lasts until Dryject has fulfilled all pre-opening obligations and the franchisee is open for business.
This amendment is significant for prospective Dryject franchisees in California because it alleviates the upfront financial burden typically associated with franchise investments. Instead of paying the initial fees before the business is operational, franchisees can delay payment until they are ready to open. This can be particularly beneficial for managing cash flow during the initial setup phase of the franchise.
However, it's important to note that this deferral is specifically tied to the determination by the California Department of Financial Protection and Innovation regarding Dryject's capitalization. This suggests that the standard initial fee structure might apply to franchisees in other states where such a determination has not been made. Therefore, prospective franchisees should carefully review the specific addenda applicable to their state to understand the exact fee structure and payment terms.
Additionally, the addendum emphasizes that the registration of the franchise offering in California does not constitute an endorsement or recommendation by the commissioner. This serves as a reminder that franchisees should conduct their own due diligence and not rely solely on the fact that the franchise is registered in the state.