What is Dryject's justification for imposing restrictions on franchise transfers?
Dryject Franchise · 2025 FDDAnswer from 2025 FDD Document
- (c) You acknowledge and agree that the restrictions on transfer imposed herein are reasonable and are necessary to protect Our Franchise System; Our trade secrets and operating procedures; Our general high reputation and image; the Licensed Rights; as well as You and Our other DryJect franchisees. Any assignment or transfer permitted by this Agreement shall not be effective until We receive a completely executed copy of all transfer documents and consent to such transfer in writing. Under no circumstances will You have a right to transfer under this Agreement before the Franchised Business has commenced operations.
- (d) Your performance is of vital importance to the market position and Our overall image, and there are many subjective factors that comprise the process by which We select a suitable franchisee. Our consent to a transfer or assignment by You of the Franchise and Franchised Business shall, in addition to the other restrictions and requirements herein noted, remain a
subjective determination and shall consider, but not be limited to, whether:
(i) All obligations of Yours under this Agreement and all other franchise documents, and the relationship created under those agreements are being assumed by the transferee;
(ii) All ascertained debts of Yours to Us and Our affiliates have been paid;
(iii) You, at the time of the request to transfer and as of the date of transfer, are not in default under this Agreement or any other franchise agreement;
(iv) Except for other DryJect franchisees, the proposed transferee does not operate or participate in an entity that operates a franchise, license, or other business offering products and/or services similar to those offered by the Franchised Business;
(v) The proposed transferee meets all of Our requirements for new franchisees, including, but not limited to, good reputation and character, experience, business acumen, operational ability, financial strength and stability, willingness and ability to devote full time and best efforts to the operation of the Franchised Business and other business considerations as We may reasonably apply in evaluating new franchisees.
We must be provided all information about the proposed transferee as We may reasonably require;
Source: Item 8 — BUSINESS RELATIONSHIP (FDD pages 68–229)
What This Means (2025 FDD)
According to Dryject's 2025 Franchise Disclosure Document, the restrictions on franchise transfers are in place to protect several key aspects of the Dryject franchise system. These include Dryject's trade secrets, operating procedures, overall reputation and image, and the licensed rights granted to franchisees. Dryject emphasizes that these restrictions are considered reasonable and necessary for the continued success and integrity of the franchise network.
Dryject also states that a franchisee's performance is critical to the brand's market position and overall image. The selection of suitable franchisees involves many subjective factors. Therefore, Dryject retains the right to assess potential transferees based on various criteria. These include the transferee's willingness to assume all obligations under the franchise agreement, payment of all outstanding debts to Dryject and its affiliates, and the absence of any defaults by the current franchisee.
Furthermore, Dryject will evaluate whether the proposed transferee operates a similar business (excluding other Dryject franchisees) and meets all the requirements for new franchisees. These requirements encompass factors such as reputation, character, experience, business acumen, operational ability, and financial stability. Dryject also requires full disclosure of information about the proposed transferee to facilitate a comprehensive evaluation. These transfer restrictions allow Dryject to maintain brand standards and protect the interests of all franchisees.