Can a Dog Haus Area Development Agreement be terminated by the Area Developer?
Dog_Haus Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section In Area Development Agreement (Exhibit B) | Summary |
|---|---|---|
| n. Franchisor's right of first | Section 9.3 | We may match any offer to purchase your business. |
| refusal to acquire Area | ||
| Developer's business | ||
| o. Franchisor's option to purchase Area Developer's business | 9.1 | We may sell our assets, the Dog Haus Marks or the Dog Haus System, may sell securities in a public offering or in a private placement, may merge, acquire other corporations, or be acquired by another corporation, and may undertake a refinancing, recapitalization, leveraged buy-out, or other economic or financial restructuring (each a "Capital Event") all without your consent or approval by you. Upon the occurrence of a Capital Event, we have the right to compel you to sell to us the assets of all your Dog Haus Restaurants, whether or not they are open or under construction. |
| p. Death or disability of Area Developer | Section 9.5 | Your spouse, heirs or personal representative has 180 days to purchase your interest or complete an assignment of your interest to a qualified, approved third party, subject to the transfer provisions. |
| q. Non-competition covenants during the term of the franchise | Section 13.2 | You are prohibited from: (i) diverting any present or prospective Dog Haus customer to any competitor, or performing any other act injurious or prejudicial to the goodwill associated with the Dog Haus Marks and the Dog Haus System; or (ii) owning or having any interest in a "Competitive Business" with Dog Haus Restaurants. A "Competitive Business" is defined as any restaurant business that prepares, offers and sells gourmet hot dogs, sausages, hamburgers, chicken, plant-based food products or any combination of these products as primary menu items and any business that looks like, copies, imitates, or operates with similar trade dress or décor to Dog Haus Restaurants. (subject to state law) |
| r. Non-competition covenants after the franchise is terminated or expires | Section 13.3 | For 2 years following the expiration or termination of your Area Development Agreement, you cannot own or have any interest in a competitive business within 2 miles of any location designated as a "Franchised Location" in a Franchise Agreement between you and us, or at any location within a 2 mile radius of any Dog Haus Restaurant or a Franchised Location. (subject to state law) |
| s. Modification of the Area Development Agreement | Section 18.5 | The Area Development Agreement can be modified or amended only by written agreement of all of the parties. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION THE FRANCHISE RELATIONSHIP (FDD pages 63–72)
What This Means (2025 FDD)
According to Dog Haus's 2025 Franchise Disclosure Document, the Area Development Agreement can only be modified or amended through a written agreement signed by all parties involved. This implies that the Area Developer cannot unilaterally terminate the agreement without the franchisor's consent.
This requirement for mutual written agreement protects both Dog Haus and the Area Developer. Dog Haus ensures that changes to the agreement are carefully considered and align with their overall franchise strategy. The Area Developer benefits from the assurance that the agreement cannot be altered without their explicit consent, safeguarding their rights and investments.
Prospective Area Developers should carefully review the conditions under which either party can terminate the Area Development Agreement, as detailed in Item 17 of the Dog Haus FDD. Understanding these termination clauses is crucial for assessing the risks and obligations associated with the agreement. It is also important to seek legal counsel to fully understand the implications of the agreement and ensure that their interests are protected.