Is operating a Dryject franchise in violation of any law considered a breach of the franchise agreement?
Dryject Franchise · 2025 FDDAnswer from 2025 FDD Document
anchised Business' premises, which We reasonably believe presents health and/or safety concerns for the Franchised Business' customers or employees;
- (xv) Engage in any act(s) that is so dishonest, untrustworthy, self-dealing, and/or fraudulent, that it goes to the essence of the Franchise Agreement and/or frustrates one of the principal purposes of the Franchise Agreement and/or irreparably damages the trust between Us and You;
- (xvi) Commit a material breach that cannot be cured; or,
- (xvii) If, without Our prior written consent, You or persons controlling, controlled by, or under common control with You shall have any interest, direct or indirect, in the ownership or operation of any business engaged in the sale of similar or other related products or services within Your Designated Territory, or in any business, regardless of where located, that looks like, copies, or imitates any DryJect business, or operates in a manner tending to have such effect.
- (e) Notwithstanding the foregoing provisions of this Section, You shall be in breach under this Agreement and all rights granted under this Agreement will automatically terminate without notice to You, if You do any of the following:
- (i) Make an assignment for the benefit of creditors or an admission of Your inability to pay Your obligations as they become due; or,
- (ii) File a voluntary petition in bankruptcy or any pleading seeking any reorganization, arrangement, composition, adjustment, liquidation, dissolution or similar release under any law, or admit or fail to contest the material allegations of any such pleading or action for the benefits of creditors filed against You, or are adjudicated bankrupt or insolvent, or a receiver is appointed for a substantial part of Your assets or the assets of the Franchised Business, or the claims of Your creditors or the creditors of the Franchised Business are abated or subject to moratorium under any laws.
- (f) If You are in material default as described in Subsection (b) above, We have the right to suspend any and all operating assistance as described in this Agreement and/or the Operations Manual to You.
Source: Item 8 — BUSINESS RELATIONSHIP (FDD pages 68–229)
What This Means (2025 FDD)
According to the 2025 Dryject FDD, several actions can lead to a breach of the franchise agreement, some of which relate to legal compliance. Specifically, if a Dryject franchisee commits a material breach that cannot be cured, this constitutes a breach of the agreement. Additionally, if the franchisee engages in dishonest, untrustworthy, self-dealing, or fraudulent acts that fundamentally undermine the franchise agreement or damage the trust between Dryject and the franchisee, it can also lead to a breach. These actions don't explicitly mention 'violation of law', but fraudulent or dishonest acts often involve legal violations.
Furthermore, the Dryject franchise agreement outlines conditions under which the agreement can be terminated without notice. These include making an assignment for the benefit of creditors or admitting an inability to pay obligations, filing for bankruptcy, or having a receiver appointed for a substantial part of the franchisee's assets. While these scenarios are primarily financial, they can arise from or lead to legal issues that would constitute a breach.
It's also important to note that the Dryject agreement includes clauses about compliance with applicable laws. The agreement states that it's the intention of both parties to comply with all laws applicable to the covenants within the agreement. If any covenant is found to exceed legal limits, it can be reformed to comply with applicable law. This suggests that operating the franchise in a way that violates laws could be seen as a failure to comply with the agreement's intention, potentially leading to a breach. However, the FDD does not explicitly state that any violation of law is a breach of contract.