Does Dryject require consent for a transfer of any interest under the agreement?
Dryject Franchise · 2025 FDDAnswer from 2025 FDD Document
- (viii) You shall not issue any additional stock, membership, or interests in You and no individual with ownership interest in You shall transfer, assign or pledge any ownership interest in You without Our prior written consent, which shall not be unreasonably withheld, and a legend setting forth such restriction on transfers shall be contained in the business entity's organizational and governing documents and other appropriate documents such as certificates and stocks. In giving Our consent, We shall have the right
A stop transfer order shall be in effect against the transfer of any securities on Your records except transfers permitted by this Agreement.
- (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;
| 3. Item 17, summary column for (f) is amended to add the following: | |
|---|---|
| With respect to franchises governed by Minnesota law, we will comply with Minn. | |
| Stat. Sec. 80C.14, subds. 3, 4 and 5 which require, except in certain specified cases, | |
| that you be given 90 days’ notice of termination (with 60 days to cure) and 180 | |
| days’ notice for nonrenewal of the franchise agreement and that consent to transfer | |
| of the franchise will not be unreasonably withheld. | |
Source: Item 8 — BUSINESS RELATIONSHIP (FDD pages 68–229)
What This Means (2025 FDD)
According to the 2025 Dryject FDD, Dryject requires prior written consent for any transfer of ownership interest in a franchisee's business entity. Specifically, if the franchisee is a business entity, the franchisee cannot issue additional stock, membership, or interests in the entity. Also, no individual with ownership interest can transfer, assign, or pledge any ownership interest without Dryject's prior written consent. This consent will not be unreasonably withheld. A legend setting forth such restriction on transfers must be included in the business entity's organizational and governing documents, as well as other relevant documents like certificates and stocks.
Dryject also requires consent for the transfer of the franchise itself. A stop transfer order will be in effect against the transfer of any securities, except for transfers permitted by the agreement. Any assignment or transfer permitted by the agreement is not effective until Dryject receives a completely executed copy of all transfer documents and consents to the transfer in writing. The franchisee does not have the right to transfer the franchise before the franchised business has commenced operations.
Dryject's consent to a transfer or assignment of the franchise and franchised business is a subjective determination. Dryject will consider several factors, including whether the transferee assumes all obligations, all debts to Dryject and its affiliates have been paid, the franchisee is not in default, the transferee does not operate a similar business (with exceptions for other Dryject franchisees), and the transferee meets Dryject's requirements for new franchisees. Dryject must be provided with all information about the proposed transferee as it may reasonably require.
For franchises governed by Minnesota law, Dryject will comply with Minnesota statutes regarding franchise transfers, meaning that consent to transfer of the franchise will not be unreasonably withheld.