Can a Dog Haus franchisee face competition from outlets that the franchisor owns?
Dog_Haus Franchise · 2025 FDDAnswer from 2025 FDD Document
fore the date of the Annual Franchise Conference, whether or not you attend the Annual Franchise Conference. (Franchise Agreement, Section 7.29).
ITEM 12 TERRITORY
Franchise Agreement
You will be permitted to operate your Franchised Restaurant at a specific location that we accept, as described in your Franchise Agreement. You will not receive an exclusive territory. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control. Our acceptance of your Franchised Location will be based upon a variety of factors which may include the viability of the then-current location and demographics including, number of households, household income, vehicular traffic, and number of Franchised Restaurants near the proposed new location. You may face competition from other Franchised Restaurants that we or our affiliate franchise or own and that operate at traditional sites.
You will be granted a protected territory ("Protected Area") of a 1/2 - 5 mile radius from your Franchised Restaurant as described in the Franchise Agreement. Your Protected Area will be designated when you have identified a site for your Franchised Restaurant. Factors that we consider in determining the size of your Protected Area include the demographics, population size, age and income levels, neighboring and adjacent retail tenants, road visibility, traffic patterns, geographical barriers and proximity of other Dog Haus Restaurants or competitors serving the same market area. Provided you are not in default under your Franchise Agreement, we will not own, operate, sell or issue a Franchised Restaurant franchise to another franchisee in your Protected Area. There are no other radius restrictions or minimum population requirements that limit where we can franchise or operate another Franchised Restaurant. You may not relocate your Franchised Restaurant to any other location without our prior written consent.
If you are a Remote Kitchen franchisee, with our prior written consent, we may grant you the non-exclusive right to fulfill orders from Food Delivery Service customers in geographic areas immediately adjacent to your Protected Area who are not located within the protected area of another Dog Haus Restaurant. We may revoke this grant for any reason or no reason upon 30 days' prior written notice to you. You must advise all Food Delivery Services of these delivery restrictions imposed on you.
We expressly reserve the exclusive, unrestricted right, in our sole and absolute discretion, directly and indirectly to: (i) develop, own and operate, and to grant franchises to third parties to develop, own and operate, Franchised Restaurants outside of your Protected Area, regardless of their proximity to the Franchised Restaurant;
Source: Item 12 — TERRITORY (FDD pages 53–57)
What This Means (2025 FDD)
According to Dog Haus's 2025 Franchise Disclosure Document, a franchisee may face competition from outlets that Dog Haus owns. Specifically, this competition can arise from other franchisees, outlets that Dog Haus owns, or from other distribution channels or competitive brands that Dog Haus controls. This applies both to franchisees with a standard Franchise Agreement and those with an Area Development Agreement. Dog Haus also retains the right to develop, own, and operate Franchised Restaurants outside of a franchisee's Development Area or Protected Area, regardless of proximity to the franchisee's location.
Dog Haus also reserves the right to sell or distribute Dog Haus branded products at any location, including within or outside a franchisee's Protected Area, through various methods such as the internet, mail order catalogs, direct mail marketing, catering, and other distribution methods. Furthermore, Dog Haus can market on the internet and use Dog Haus marks, deliver and cater, and/or license other franchisees or third parties to deliver and cater at any location within or outside of a franchisee's Protected Area without compensation to the franchisee. Dog Haus may also own or operate and franchise or license others to own or operate Franchised Restaurants at any Non-Traditional Venue within and outside of a franchisee's Development Area, regardless of their proximity to the franchisee's restaurant.
These stipulations mean that while a Dog Haus franchisee is granted a Protected Area, Dog Haus retains significant rights to operate and franchise other outlets and channels that could compete with the franchisee's business. The franchisee's Protected Area provides some limited protection, but Dog Haus's broad rights to operate outside of that area, including through online sales, catering, and non-traditional venues, could create competitive pressures. A prospective franchisee should carefully consider these competitive factors and assess the potential impact on their restaurant's performance.
It is important to note that Dog Haus is not required to compensate the franchisee if it exercises any of these rights. This highlights the importance of understanding the scope of the Protected Area and the potential for competition from other Dog Haus outlets and distribution channels when evaluating the franchise opportunity.