In Virginia, if a ground for default or termination stated in the Dryject franchise agreement does not constitute 'reasonable cause' under Virginia law, is that provision enforceable?
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."
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 enforceability of default or termination provisions within the franchise agreement in Virginia is contingent upon whether they constitute 'reasonable cause' under Virginia law. Specifically, if any ground for default or termination stated in the Dryject franchise agreement does not meet the definition of 'reasonable cause' as defined in the Virginia Retail Franchising Act or other Virginia laws, that particular provision may not be enforceable. This addendum is included in the Franchise Disclosure Document for use in the Commonwealth of Virginia in recognition of the restrictions contained in Section 13.1-564 of the Virginia Retail Franchising Act.
This means that Dryject franchisees in Virginia are afforded certain protections under state law regarding termination of their franchise agreements. Dryject cannot enforce a termination clause that is deemed unreasonable under Virginia law, even if that clause is written into the franchise agreement. This provision aims to protect franchisees from potentially unfair or arbitrary terminations by ensuring that there is a legitimate and justifiable reason for ending the franchise relationship.
Prospective Dryject franchisees in Virginia should carefully review the franchise agreement and any related documents with legal counsel to ensure they understand their rights and obligations under both the agreement and Virginia law. Understanding what constitutes 'reasonable cause' for termination in Virginia is crucial for protecting their investment and business operations. This also means that any statements or acknowledgments signed by the franchisee cannot waive claims under state franchise law or disclaim reliance on statements made by Dryject.