Must the General Manager of a Dog Haus franchise own equity in the franchise?
Dog_Haus Franchise · 2025 FDDAnswer from 2025 FDD Document
You must designate a Principal Owner acceptable to us who will be responsible for the operational decisions of your Franchised Restaurant. Your Principal Owner must devote his or her full time to the Franchised Restaurant and must own at least 10% interest in your equity and voting rights (unless you are a publicly held entity or a wholly-owned subsidiary of a publicly-held entity) when you sign your Franchise Agreement. Under certain circumstances we may waive the requirement that your Principal Owner must have a 10% interest in your equity and voting rights. You must also designate a General Manager who will be the individual responsible for your Franchised Business in the absence of the Principal Owner. Your General Manager does not have to own an equity interest in you or the franchise.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 61–62)
What This Means (2025 FDD)
According to Dog Haus's 2025 Franchise Disclosure Document, the General Manager is not required to have equity in the franchise. The FDD states that the franchisee must designate a Principal Owner who is responsible for the operational decisions of the Franchised Restaurant and must own at least 10% interest in the equity and voting rights. However, the General Manager, who is responsible for the Franchised Business in the absence of the Principal Owner, does not have to own an equity interest in the franchise.
This distinction is important for prospective Dog Haus franchisees because it provides flexibility in structuring their management team. The Principal Owner bears the responsibility of having a financial stake in the business, aligning their interests with the success of the franchise. The General Manager, on the other hand, can be an employee focused on day-to-day operations without the added pressure of equity ownership.
It is common in the franchise industry to require a Principal Owner or operating partner to have equity, as this encourages commitment and active involvement. However, not requiring equity for the General Manager position allows franchisees to hire qualified managers who may not have the capital or desire to invest in the business. This can broaden the pool of potential candidates and make it easier to find competent management for the Dog Haus franchise.