What is the purpose of the initial Dryject franchise fee?

According to Dryject's 2025 Franchise Disclosure Document, the initial franchise fee of $29,500 is paid upon signing the Franchise Agreement. This fee is considered fully earned and non-refundable by Dryject to cover administrative and other expenses incurred while entering into the agreement. It also compensates Dryject for the lost or deferred opportunity to enter into similar agreements with other potential franchisees. The FDD states that there is no financing available from Dryject for the payment of this initial franchise fee, and the fee is uniform for all franchise owners.

In simpler terms, the initial franchise fee is Dryject's compensation for the work they do to set up the franchise agreement and for missing out on other potential franchisees. Once the agreement is signed, Dryject considers the fee earned, regardless of whether the franchisee ever opens for business. This is a standard practice in franchising, as the franchisor incurs costs from the outset of the relationship.

However, there are addenda for Maryland and Minnesota that modify the payment terms of the initial fee. For franchisees in Maryland, all initial fees and payments are deferred until Dryject completes its pre-opening obligations under the franchise agreement, due to a financial assurance required by the Maryland Securities Commissioner. Similarly, for franchisees in Minnesota, all initial fees and payments are deferred until Dryject has fulfilled its initial pre-opening obligations and the franchise is open for business. These deferral clauses provide some financial protection to franchisees in those states, ensuring they only pay the initial fee once Dryject has delivered on its initial obligations.

Additionally, an addendum for New York states that no portion of the initial franchise fee has been allocated to the trademark or intellectual property. Instead, the fee consists only of payments for initial training, advertising, manuals, uniforms, and legal costs, which are distinct from and not brand or trademark related to Dryject. Only the royalty fee is related to the trademark and intellectual property. This distinction may have implications for how the fee is treated for accounting or tax purposes.