What is the Dog Haus franchisee's responsibility regarding finding the Franchised Location?
Dog_Haus Franchise · 2025 FDDAnswer from 2025 FDD Document
Once Franchisee has identified the new Franchised Location, Franchisor has approved it, and the Lease has been submitted to Franchisor to allow Franchisor at least fifteen (15) days to confirm that the provisions set forth in Section 5.2 have been included in the proposed Lease and that the Landlord and Franchisee have executed an Option to Obtain Lease Assignment in the form specified by Franchisor, Franchisor will prepare an addendum to Exhibit A and provide it to Franchisee.
If Franchisee fails to secure the new Franchised Location within twelve (12) months of the date of Franchisor's approval of the new Franchised Location, Franchisor shall have the right to estimate and bill Franchisee for Royalty Fees for the time period following the expiration of the twelve (12) month period based upon the Royalty Fees received for the Franchised Restaurant during the identical periods of the last preceding
calendar year plus an additional ten percent (10%) of such amount or, if the Franchised Restaurant was not in operation during the identical period of the last preceding year, based upon the average Royalty Fees paid during the number of months the Franchised Restaurant was in operation plus an additional ten percent (10%) of that amount.
Source: Item 22 — CONTRACTS (FDD page 87)
What This Means (2025 FDD)
Based on the 2025 Dog Haus Franchise Disclosure Document, the franchisee is responsible for identifying the location for their Dog Haus franchise. Once the franchisee identifies a location, Dog Haus must approve it. The lease must then be submitted to Dog Haus, allowing them at least fifteen days to confirm that specific provisions outlined in Section 5.2 are included in the proposed lease. Dog Haus also needs to confirm that the landlord and franchisee have executed an Option to Obtain Lease Assignment in the form specified by Dog Haus. After these confirmations, Dog Haus will prepare an addendum to Exhibit A and provide it to the franchisee.
If the franchisee fails to secure a new location within twelve months of Dog Haus's approval, Dog Haus has the right to estimate and bill the franchisee for Royalty Fees. This estimate will be based on the Royalty Fees received for the franchise during the same period of the last preceding calendar year, plus an additional ten percent. If the franchise was not in operation during that period, the estimate will be based on the average Royalty Fees paid during the months the franchise was in operation, plus an additional ten percent.
This arrangement places the onus on the franchisee to find and secure a suitable location that meets Dog Haus's approval criteria within a specific timeframe. Failure to do so can result in financial penalties in the form of estimated Royalty Fees, even if the franchise is not yet operational at the new location. This highlights the importance of diligent site selection and lease negotiation for prospective Dog Haus franchisees.