Who are considered 'Constituents' under the Dog Haus franchise agreement?
Dog_Haus Franchise · 2025 FDDAnswer from 2025 FDD Document
Notwithstanding any provision in this Agreement to the contrary, Area Developer and the Owners acknowledge and agree that:
- 18.12.1 This Agreement (and the relationship of the Parties which arises from this Agreement) grants Franchisor the discretion to make decisions, take actions or refrain from taking actions not inconsistent with the explicit rights and obligations of Area Developer and the Owners hereunder that may affect Area Developer and the Owners' interests favorably or adversely.
Franchisor shall use its Business Judgment in exercising such discretion based on its assessment of its own interests and balancing those interests against the interests, promotion, and benefit of the Dog Haus System and other Dog Haus Area Developers, Dog Haus Restaurants generally, and specifically without considering the individual interests of Area Developer or the Owners or the individual interests of any other Dog Haus Area Developer.
Area Developer and the Owners acknowledge and agree that Franchisor shall have no liability to Area Developer or the Owners for the exercise of its discretion in this manner; and even if Franchisor has numerous motives for a particular action or decision, so long as at least one motive is a reasonable business justification, no trier of fact in any legal action shall substitute his or her judgment for Franchisor's judgment so exercised and no such action or decision shall be subject to challenge for abuse of discretion.
Source: Item 23 — RECEIPTS (FDD pages 87–328)
What This Means (2025 FDD)
Based on the 2025 Dog Haus Franchise Disclosure Document, the term 'Constituents' is not explicitly defined. However, the FDD does refer to 'Area Developer and the Owners' in the context of business decisions and discretion exercised by Dog Haus.
Specifically, the document states that the franchise agreement grants Dog Haus the discretion to make decisions that may affect the Area Developer's and Owners' interests. Dog Haus will use its business judgment, balancing its own interests against those of the Dog Haus system and other Area Developers, without specifically considering the individual interests of the Area Developer or Owners.
The FDD emphasizes that Dog Haus will not be liable to the Area Developer or the Owners for exercising its discretion, provided it is done in good faith. This indicates that while 'Area Developer and the Owners' are not explicitly called 'Constituents,' they are parties whose interests are considered (though not individually) in Dog Haus's decision-making process. A prospective franchisee should seek clarification from Dog Haus regarding the precise definition and implications of this relationship.