Does Dryject's right to step in prevent Dryject from exercising other rights under the Dryject agreement?
Dryject Franchise · 2025 FDDAnswer from 2025 FDD Document
- (a) If a material default under this Agreement occurs and remains uncured, or is not subject to cure, or if Your actions jeopardize the integrity of the Marks or System, then You authorize Us or Our designee to operate the Franchised Business for as long as, in Our reasonable judgment, it is necessary or practical. You acknowledge that this right to step-in is necessary to preserve the value and integrity of the Marks and System. Even if We exercise this right to step in, You agree that We do not lose or waive a right to exercise any other rights or remedies which We may have legally under this Agreement. Among the reasons We may act under these step-in rights are:
- (i) We reasonably determine that You are unable to operate the Franchised Business because You are absent or incapacitated because of illness, accident, injury or death;
- (ii) You have not paid Your monetary obligations to Us or others when they are due;
- (iii) You have not removed non-consensual liens or encumbrances which have been placed against the Franchised Business; or,
- (iv) We determine that material operational problems require that We operate the Franchised Business for a period of time.
- (b) During a step-in period, We will maintain in a separate account, all Gross Revenues of the Franchised Business. From that account We will pay all expenses of the Franchised Business, which will include the Royalty Service Fee, all Marketing Fund contributions or payments, and reasonable compensation and expenses for Our representatives. If these step-in rights are exercised, You agree to hold Us harmless and hold harmless Our representatives for all actions or omissions which occur during the course of the temporary operation. You agree to pay Our reasonable attorneys' fees and costs which might arise from the exercise of these step-in rights. Nothing in this Section 33 will prevent Us from exercising any other rights which We may have under this Agreement, including the right to terminate the Agreement.
Source: Item 8 — BUSINESS RELATIONSHIP (FDD pages 68–229)
What This Means (2025 FDD)
According to the 2025 Dryject FDD, Dryject's right to step in and operate a franchised business temporarily does not prevent Dryject from exercising any other rights or remedies it may have under the franchise agreement. This means that even if Dryject steps in to manage the business due to a franchisee's default or other issues, it retains the ability to pursue other legal options or remedies available to them.
Dryject may exercise its step-in rights if a franchisee materially defaults on the agreement, fails to cure a default, or takes actions that jeopardize the integrity of Dryject's marks or system. Dryject can operate the franchised business for as long as it deems necessary or practical to address the situation. Reasons for stepping in include the franchisee's inability to operate the business due to absence or incapacitation, failure to meet monetary obligations, failure to remove non-consensual liens, or material operational problems.
During the step-in period, Dryject will maintain a separate account for all gross revenues of the franchised business. From this account, Dryject will pay all business expenses, including the Royalty Service Fee, Marketing Fund contributions, and reasonable compensation for its representatives. The franchisee is required to hold Dryject harmless for any actions or omissions that occur during the temporary operation and to pay Dryject's reasonable attorney's fees and costs arising from the exercise of these step-in rights. The FDD explicitly states that these step-in rights do not prevent Dryject from exercising other rights, including termination of the agreement.