What is the Signer's obligation regarding actions that could be injurious to the goodwill of the Dryject system?
Dryject Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Signer shall not, directly or indirectly, do any act or omit to do any act, which would or would likely to be injurious or prejudicial to the goodwill associated with DRYJECT SYSTEM.
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- Except to the extent prohibited by the laws of the state where the Franchised Business is located, in order to protect the goodwill and unique qualities of DRYJECT SYSTEM and the confidentiality and value of Franchisor's Trade Secrets, and in consideration for the disclosure to Signer of Franchisor's Trade Secrets, Signer further undertakes and covenants that, during the time Franchisee is a franchisee of Franchisor and for the two (2) years following the termination or expiration of Franchisee's Franchise Agreement, Signer will not:
- (a) Directly or indirectly, for himself/herself or through, on behalf of or in conjunction with any person, partnership or business entity, engage in or acquire any financial or beneficial interest in (including interest in business entities, partnerships, trusts, unincorporated associations or joint ventures), advise, help or make loans to any entity involved in business which is the same as or similar to that conducted by "DryJect"® which business is, or is intended to be located, within the United States; or
Source: Item 8 — BUSINESS RELATIONSHIP (FDD pages 68–229)
What This Means (2025 FDD)
According to Dryject's 2025 Franchise Disclosure Document, a Signer is prohibited from taking any action that could harm the goodwill associated with the Dryject system. This obligation is outlined within the context of a business relationship agreement, where the Signer is expected to maintain the confidentiality of Dryject's trade secrets and use them only to support the franchisee's business operations. This restriction is in place as it is anticipated that the Signer will have access to Dryject's trade secrets as the franchisee develops and maintains their business.
This obligation extends to both direct and indirect actions, meaning the Signer cannot engage in activities that could negatively impact Dryject's reputation or brand image. This is a standard clause in franchise agreements, designed to protect the franchisor's brand and reputation, which are critical assets of the franchise system. The Signer's commitment helps ensure that the Dryject system maintains a consistent and positive image in the marketplace.
Furthermore, to protect Dryject's goodwill, unique qualities, and trade secrets, the Signer agrees not to engage in any similar business within the United States during the term of the franchise agreement and for two years after its termination or expiration. This includes not acquiring any financial interest in, advising, helping, or making loans to any entity involved in a business that is the same as or similar to Dryject. This non-compete clause is designed to prevent the Signer from using the knowledge and trade secrets gained from Dryject to compete against the franchise system, thereby protecting the goodwill and market position of Dryject.