What are some specific reasons Dryject might exercise its step-in rights?
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 Dryject's 2025 Franchise Disclosure Document, Dryject retains the right to step in and operate a franchised business under certain circumstances to preserve the brand's integrity and value. This means that Dryject can temporarily take over the operations of a franchise if the franchisee is in significant breach of the franchise agreement or if their actions threaten the Dryject system.
Dryject may exercise its step-in rights if a franchisee is unable to operate the business due to absence or incapacitation from illness, accident, injury, or death. Another reason is the failure to meet monetary obligations to Dryject or other creditors. Dryject can also step in if the franchisee fails to remove non-consensual liens or encumbrances against the business. Finally, Dryject may step in if material operational problems necessitate their intervention for a period of time.
During any step-in period, Dryject will manage all revenues and expenses of the business in a separate account. This includes paying the Royalty Service Fee, marketing contributions, and compensating their representatives. The franchisee is required to hold Dryject harmless for any actions or omissions during this temporary operation and cover Dryject's legal fees arising from the step-in. It is important to note that Dryject's step-in rights do not prevent them from exercising other rights, including terminating the franchise agreement.