What happens to fees already paid to Dog Haus if the Franchise Agreement is terminated?

According to Dog Haus's 2025 Franchise Disclosure Document, Dog Haus retains all fees paid if the Franchise Agreement is terminated. Additionally, the franchisee must immediately pay any remaining amounts due to Dog Haus and its affiliates. If the agreement terminates due to a default by the franchisee, the franchisee is responsible for paying all damages, costs, and expenses, including reasonable attorney's fees, incurred by Dog Haus as a result of the default. This obligation remains until paid in full and acts as a lien in favor of Dog Haus against the assets of the franchised restaurant.

This means that a franchisee who terminates the agreement, regardless of the reason, will not receive a refund of any fees already paid to Dog Haus. This includes the initial franchise fee, royalty fees, marketing fees, and any other payments made during the course of the franchise agreement. Furthermore, the franchisee is still obligated to pay any outstanding amounts owed to Dog Haus.

In the event of a default by the franchisee, the financial burden can be even greater. The franchisee will be responsible for covering all of Dog Haus's damages, legal fees, and other expenses resulting from the default. This can potentially lead to significant financial liabilities for the franchisee, especially if the default involves a serious breach of the agreement. The lien against the restaurant's assets further secures Dog Haus's claim, potentially jeopardizing the franchisee's investment.

This policy is fairly standard in the franchise industry, as initial fees and other payments are generally non-refundable to compensate the franchisor for initial services and lost future royalties. Prospective franchisees should carefully consider these financial implications before entering into a franchise agreement with Dog Haus, ensuring they have a clear understanding of the conditions under which termination may occur and the associated costs.