Is Dryject obligated to collect accounts receivable after termination or expiration of the franchise agreement?
Dryject Franchise · 2025 FDDAnswer from 2025 FDD Document
- (x) Assign any and all accounts receivable to Us for collection. In connection therewith You hereby appoint Us as attorney-in-fact to engage in such collection activities following the termination or expiration of this Agreement and You specifically undertake to refrain from engaging in any such collection activities upon termination or expiration. We agree to employ good faith efforts, including, where appropriate in Our sole and exclusive judgment, the commencement of legal proceedings, to collect such accounts receivable. Nothing contained herein shall be construed or deemed to impose any duty or obligation upon Us to collect such accounts receivable and, if all or a portion of such accounts receivable are not collected by Us, You release and waive any claims thereto against Us. If We are successful in collecting all or a part of such accounts receivable, We shall remit to You such sums collected after first deducting any and all monies owed to Us; after deducting the pro rata cost of servicing the customer(s) with respect to whom the receivables were collected; and, after further deducting Our costs of collection; and,
Source: Item 8 — BUSINESS RELATIONSHIP (FDD pages 68–229)
What This Means (2025 FDD)
According to Dryject's 2025 Franchise Disclosure Document, franchisees are required to assign all accounts receivable to Dryject for collection upon termination or expiration of the franchise agreement. Dryject is appointed as the attorney-in-fact to handle these collections and franchisees must not engage in any collection activities themselves after termination or expiration.
However, Dryject is not obligated to collect these accounts receivable. The document states that Dryject will employ good faith efforts to collect, including legal proceedings if deemed appropriate, but there is no duty or obligation to collect. If Dryject fails to collect all or some of the receivables, the franchisee waives any claims against Dryject.
If Dryject is successful in collecting the accounts receivable, they will remit the collected sums to the franchisee after deducting any monies owed to Dryject, the pro rata cost of servicing the customer, and Dryject's costs of collection. This means that the franchisee may not receive the full value of the receivables collected, as Dryject is entitled to deduct various expenses before remitting the balance.