What are some specific reasons Dryject might exercise its right to step in and operate the franchised business?
Dryject Franchise · 2025 FDDAnswer from 2025 FDD Document
33. STEP-IN RIGHTS
- (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 Dryject's 2025 Franchise Disclosure Document, Dryject retains the right to step in and operate a franchised business under specific circumstances. This action can be taken if a material default under the franchise agreement occurs and remains unresolved, or if the franchisee's actions jeopardize the integrity of Dryject's trademarks or overall system. Dryject emphasizes that this "step-in right" is essential to protect the value and integrity of its brand and operational methods.
Specifically, Dryject may exercise its step-in rights if the franchisee is unable to operate the business due to absence or incapacitation resulting from illness, accident, injury, or death. Another trigger is the franchisee's failure to meet monetary obligations to Dryject or other creditors when due. Additionally, Dryject may step in if the franchisee fails to remove non-consensual liens or encumbrances placed against the franchised business. Finally, Dryject can take control if it determines that significant operational problems necessitate its direct management for a period of time.
During any period in which Dryject exercises its step-in rights, Dryject will maintain a separate account for all of the franchised business's gross revenues. From this account, Dryject will cover all business expenses, including royalty and service fees, marketing fund contributions, and reasonable compensation and expenses for its representatives. The franchisee is responsible for Dryject's legal fees and costs arising from the exercise of these step-in rights and agrees to hold Dryject harmless for actions or omissions during the temporary operation. It is important to note that exercising step-in rights does not prevent Dryject from pursuing other legal remedies, including terminating the franchise agreement.