What restriction must be included in the organizational documents of a DryJect franchisee business entity?
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
Source: Item 8 — BUSINESS RELATIONSHIP (FDD pages 68–229)
What This Means (2025 FDD)
According to DryJect's 2025 Franchise Disclosure Document, if a franchisee is a business entity, the organizational documents must include a legend restricting the transfer of ownership interests. Specifically, the legend must state that no additional stock, membership, or interests can be issued, and no individual with ownership can transfer, assign, or pledge their ownership without DryJect's prior written consent. This consent will not be unreasonably withheld.
This requirement ensures that DryJect maintains control over who owns and operates its franchises. By requiring this restriction, DryJect can carefully vet potential new owners and prevent unwanted or unqualified individuals from gaining control of a franchise. This protects the brand's reputation and the interests of other franchisees in the system.
For a prospective DryJect franchisee, this means that if they choose to operate their franchise through a corporation, LLC, partnership, or other business entity, they must ensure that the organizational documents of that entity include the required restriction on ownership transfers. This may require working with an attorney to draft or amend the documents to comply with DryJect's requirements. Failure to include this restriction could be a breach of the franchise agreement.