After termination or expiration of the Dryject agreement, can the franchisee engage in collection activities for accounts receivable?
Dryject Franchise · 2025 FDDAnswer from 2025 FDD Document
- (x) Assign any and all accounts receivable to Us for collection. In connection therewith You hereby appoint Us as attorney-in-fact to engage in such collection activities following the termination or expiration of this Agreement and You specifically undertake to refrain from engaging in any such collection activities upon termination or expiration. We agree to employ good faith efforts, including, where appropriate in Our sole and exclusive judgment, the commencement of legal proceedings, to collect such accounts receivable. Nothing contained herein shall be construed or deemed to impose any duty or obligation upon Us to collect such accounts receivable and, if all or a portion of such accounts receivable are not collected by Us, You release and waive any claims thereto against Us. If We are successful in collecting all or a part of such accounts receivable, We shall remit to You such sums collected after first deducting any and all monies owed to Us; after deducting the pro rata cost of servicing the customer(s) with respect to whom the receivables were collected; and, after further deducting Our costs of collection; and,
- (xi) Immediately refrain from engaging in any and all contacts with customers or former customers of the Franchised Business, whether with respect to collection of accounts receivable, to provide services to such customers or former customers pursuant to any business conducted by You, whether or not similar to the Franchised Business, or for any other purpose whatsoever.
Source: Item 8 — BUSINESS RELATIONSHIP (FDD pages 68–229)
What This Means (2025 FDD)
According to Dryject's 2025 Franchise Disclosure Document, franchisees are explicitly prohibited from engaging in collection activities for accounts receivable after the termination or expiration of their Franchise Agreement. Instead, the franchisee must assign all accounts receivable to Dryject for collection.
Dryject is appointed as the attorney-in-fact to handle these collections and will make good faith efforts to collect outstanding amounts, including initiating legal proceedings if deemed appropriate. However, Dryject is not obligated to collect these receivables, and the franchisee waives any claims against Dryject if they are not successful in collecting all or part of the amounts owed.
If Dryject successfully collects any accounts receivable, they will remit the collected sums to the franchisee after deducting several items. These deductions include any monies the franchisee owes to Dryject, the pro rata cost of servicing the customer related to the receivables, and Dryject's costs of collection. Furthermore, the franchisee is prohibited from contacting customers or former customers of the franchised business regarding the collection of accounts receivable or for any other purpose.