In Virginia, what does the Dryject addendum state about the enforceability of termination provisions that do not constitute 'reasonable cause'?
Dryject Franchise · 2025 FDDAnswer from 2025 FDD Document
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."
No statement, questionnaire, or acknowledgment signed or agreed to by a franchisee in connection with the commencement of the franchise relationship shall have the effect of (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on any statement made by any franchisor, franchise seller, or other person acting on behalf of the franchisor. This provision supersedes any other term of any document executed in connection with the franchise.
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 addresses the enforceability of termination provisions within the franchise agreement. It states that under Section 13.1-564 of the Virginia Retail Franchising Act, it is illegal for Dryject to terminate a franchise agreement without reasonable cause. Therefore, if any of the reasons for default or termination listed in the franchise agreement do not meet the definition of "reasonable cause" under Virginia law, that specific termination provision may not be enforceable. This addendum modifies the summary column of Item 17 Paragraph (h) of the Virginia Disclosure Document to include this clarification.
This means that a Dryject franchisee in Virginia has some protection against arbitrary termination. The franchisor must have a legitimate, legally sound reason to end the franchise agreement. The definition of "reasonable cause" is determined by the Virginia Retail Franchising Act and other relevant Virginia laws, which provides a legal standard that Dryject must adhere to when considering termination.
Furthermore, the addendum clarifies that no statement, questionnaire, or acknowledgment signed by the franchisee at the start of the franchise can waive claims under Virginia franchise law, including claims of fraud in the inducement, or disclaim reliance on statements made by Dryject. This provision overrides any conflicting terms in other documents related to the franchise agreement, strengthening the franchisee's rights under Virginia law.