In Virginia, does the Dryject addendum define what constitutes 'reasonable cause' for termination of a franchise agreement?
Dryject Franchise · 2025 FDDAnswer from 2025 FDD Document
In recognition of the restrictions contained in Section 13.1-564 of the Virginia Retail Franchising Act, the Franchise Disclosure Document for DryJect Management, LLC for use in the Commonwealth of Virginia shall be amended as follows:
The Summary column of Item 17 Paragraph (h) of the Virginia Disclosure Document is modified by adding the following at the end of the sentence:
"Pursuant to Section 13.1.564 of the Virginia Franchising Act, it is unlawful for a franchisor to cancel a franchise agreement without reasonable cause. If any ground for default or termination stated in the franchise agreement does not constitute "reasonable cause" as that term may be defined in the Virginia Retail Franchising Act or laws of Virginia, that provision may not be enforceable."
Source: Item 8 — BUSINESS RELATIONSHIP (FDD pages 68–229)
What This Means (2025 FDD)
According to Dryject's 2025 Franchise Disclosure Document, the addendum for Virginia acknowledges that it is unlawful for Dryject to cancel a franchise agreement without 'reasonable cause'. However, the addendum does not explicitly define what constitutes 'reasonable cause.' Instead, it clarifies that if any grounds for default or termination stated in the franchise agreement do not meet the definition of 'reasonable cause' under the Virginia Retail Franchising Act or Virginia laws, then that specific provision may not be enforceable. This means the determination of 'reasonable cause' is subject to interpretation under Virginia law.
For a prospective Dryject franchisee in Virginia, this implies that the standard termination clauses in the franchise agreement might be superseded by the state's definition of 'reasonable cause.' This provides some protection against potentially overbroad or unfair termination clauses that Dryject might include in the standard agreement. However, it also introduces some uncertainty, as the franchisee would need to understand Virginia law to fully grasp their rights.
It is important for potential Dryject franchisees in Virginia to consult with a legal professional to understand how Virginia law defines 'reasonable cause' in the context of franchise agreements. This will help them assess the enforceability of the termination clauses in the Dryject franchise agreement and understand their rights and obligations. Franchisees should also seek clarification from Dryject regarding specific examples of what they consider 'reasonable cause' for termination to better understand the franchisor's perspective.