Are there any restrictions on Dryject's right to transfer or assign the franchise agreement?
Dryject Franchise · 2025 FDDAnswer from 2025 FDD Document
- (viii) You shall not issue any additional stock, membership, or interests in You and no individual with ownership interest in You shall transfer, assign or pledge any ownership interest in You without Our prior written consent, which shall not be unreasonably withheld, and a legend setting forth such restriction on transfers shall be contained in the business entity's organizational and governing documents and other appropriate documents such as certificates and stocks. In giving Our consent, We shall have the right
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 39–41)
What This Means (2025 FDD)
According to the 2025 Dryject FDD, Dryject places several restrictions on a franchisee's ability to transfer or assign their franchise agreement. Specifically, if the franchisee is a business entity, they cannot issue additional stock, membership, or interests in the entity, nor can any individual with ownership transfer, assign, or pledge their ownership interest without Dryject's prior written consent. Dryject states that this consent will not be unreasonably withheld. The organizational documents must also contain a legend setting forth such transfer restrictions.
For Dryject, the restrictions on transfer are deemed reasonable and necessary to protect the franchise system, trade secrets, operating procedures, reputation, image, and the rights of other franchisees. No transfer is effective until Dryject receives a fully executed copy of all transfer documents and provides written consent. A franchisee cannot transfer the agreement before the franchised business has commenced operations.
Dryject's consent to a transfer is a subjective determination, considering factors such as whether the transferee assumes all obligations under the agreement, all debts to Dryject and its affiliates are paid, and the franchisee is not in default. The proposed transferee cannot operate a similar business (except for other Dryject franchisees) and must meet all of Dryject's requirements for new franchisees, including good reputation, experience, financial strength, and the willingness to devote full time and effort to the business. Dryject must also be provided with all information about the proposed transferee that it may reasonably require.