What is the significance of the California Franchise Investment Law regarding agreements related to the Dryject franchise sale?
Dryject Franchise · 2025 FDDAnswer from 2025 FDD Document
m outside the State of California.
Section 31125 of the California Corporations Code requires us to give you a disclosure document, in a form containing the information that the commissioner may by rule or order require, before a solicitation of a proposed material modification of an existing franchise.
You must sign a general release if you renew or transfer your franchise. California Corporations Code §31512 voids a waiver of your rights under the Franchise Investment Law (California Corporations Code §§31000 through 31516). Business and Professions Code §20010 voids a waiver of your rights under the Franchise Relations Act (Business and Professions Code §§20000 through 20043).
Any condition, stipulation or provision in the Franchise Agreement which would result in your waiver of compliance with any provision of the California Franchise Relations Act is void to the extent that such provision violates such law.
OUR WEBSITE HAS NOT BEEN REVIEWED OR APPROVED BY THE CALIFORNIA DEPARTMENT OF FINANCIAL PROTECTION AND INNOVATION. ANY COMPLAINTS CONCERNING THE CONTENT OF THIS WEBSITE MAY BE DIRECTED TO THE CALIFORNIA DEPARTMENT OF FINANCIAL PROTECTION AND INNOVATION at www.dfpi.ca.gov.
Any provision of a franchise agreement, franchise disclosure document, acknowledgement, questionnaire, or other writing, including any exhibit thereto, disclaiming or denying any of the following shall be deemed contrary to public policy and shall be void and unenforceable:
- (a) Representations made by the franchisor or its personnel or agents to a prospective franchisee.
- (b) Reliance by a franchisee on any representations made by the franchisor or its personnel or agents.
- (c) Reliance by a franchisee on the franchise disclosure document, including any exhibit thereto.
- (d) Violations of any provision of this division.
You will not receive an exclusive territory. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control.
California's Franchise Investment Law (Corporations Code sections 31512 and 31512.1) states that any provision of a franchise agreement or related document requiring the franchisee to waive specific provisions of the law is contrary to public policy and is void and unenforceable. The law also prohibits a franchisor from disclaiming or denying (i) representations it, its employees, or its agents make to you, (ii) your ability to rely on any representations it makes to you, or (iii) any violations of the law.
No statement, questionnaire, or acknowledgment signed or agreed to by a franchisee in connection with the commencement of the franchise relationship shall have the effect of (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on any statement made by any franchisor, franchise seller, or other person acting on behalf of the franchisor.
Source: Item 8 — BUSINESS RELATIONSHIP (FDD pages 68–229)
What This Means (2025 FDD)
According to Dryject's 2025 Franchise Disclosure Document, the California Franchise Investment Law provides significant protections and regulations regarding franchise agreements within the state. The FDD stipulates that franchisees in California cannot waive their rights under the Franchise Investment Law (California Corporations Code §§31000 through 31516) or the Franchise Relations Act (Business and Professions Code §§20000 through 20043). This ensures that franchisees retain their legal rights and protections, regardless of any provisions in the franchise agreement that might suggest otherwise.
Several specific provisions within the Dryject franchise agreement are subject to California law. For instance, any condition, stipulation, or provision in the Franchise Agreement that would result in a franchisee waiving compliance with any provision of the California Franchise Relations Act is void to the extent that such provision violates the law. Additionally, the franchise agreement contains a covenant not to compete that extends beyond the termination of the franchise, but this provision may not be enforceable under California law. The agreement also requires the application of Pennsylvania law, which may also be unenforceable in California.
Furthermore, California law impacts how Dryject collects initial franchise fees. The California Department of Financial Protection and Innovation has determined that Dryject has not demonstrated adequate capitalization and/or must rely on franchise fees to fund its operations. As a result, Dryject must defer the collection of all initial fees from California franchisees until all pre-opening obligations are completed and the franchisee is open for business. This provides a level of financial security for new franchisees, ensuring they are not paying fees before the business is ready to operate.
Finally, the FDD emphasizes that prospective franchisees are encouraged to seek independent legal counsel to understand how California and federal laws apply to provisions in the franchise agreement, especially those restricting venue to a forum outside California. The Dryject FDD also states that the California Department of Financial Protection and Innovation has not reviewed or approved their website, and it provides contact information for any complaints regarding the website's content. These disclosures highlight the importance of due diligence and legal consultation for potential Dryject franchisees in California.