What factors does Dog Haus consider when granting franchise rights?
Dog_Haus Franchise · 2025 FDDAnswer from 2025 FDD Document
21.14 Business Judgment. Notwithstanding any provision in this Agreement to the contrary, Franchisee and the Owners acknowledge and agree that:
21.14.1 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 Franchisee and the Owners hereunder that may affect Franchisee 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 Franchisees, Dog Haus Restaurants generally, and specifically without considering the individual interests of Franchisee or the Owners or the individual interests of any other Dog Haus Franchisee. Franchisee and the Owners acknowledge and agree that Franchisor shall have no liability to Franchisee 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. If Franchisor takes any action or Franchisor chooses not to take any action in its discretion with regard to any matter related to this Agreement and its actions or inaction are challenged for any reason, the Parties expressly direct the trier of fact to find that Franchisor's reliance on a business reason in the exercise of its discretion is to be viewed as a reasonable and proper exercise of its discretion, without regard to whether other reasons for its decision may exist and without regard to whether the trier of fact would independently accord the same weight to the business reason.
Source: Item 22 — CONTRACTS (FDD page 87)
What This Means (2025 FDD)
Based on the 2025 Dog Haus Franchise Disclosure Document, Dog Haus retains significant discretion in making decisions that can affect franchisees. Specifically, Dog Haus will use its business judgment based on its own interests, balancing those interests against the interests of the Dog Haus system and other Dog Haus franchisees, without considering the individual interests of a particular franchisee.
Dog Haus's decisions and actions are not required to favor individual franchisees, and the company is not liable to franchisees for how it exercises its discretion, provided it acts in good faith. This means that Dog Haus can make choices that benefit the overall system even if those choices might negatively impact an individual franchise location.
This clause emphasizes that franchisees cannot challenge Dog Haus's decisions as long as they are based on reasonable business justification. Prospective franchisees should understand that Dog Haus prioritizes the collective interests of the franchise system and is granted considerable latitude in its decision-making process. Franchisees have very limited recourse to challenge Dog Haus's decisions, absent evidence of bad faith.