Is the Initial Franchise Fee for a Dog Haus franchise refundable?
Dog_Haus Franchise · 2025 FDDAnswer from 2025 FDD Document
- 4.1 Initial Franchise Fee. On the Effective Date, Franchisee shall pay Franchisor the Initial Franchise Fee in the manner provided in Section 4.6. The Initial Franchise Fee shall be non-refundable, in whole or in part, when paid.
If the Principal Owner (i) fails to complete the Pre-Opening Initial Training Program within five (5) months after the Effective Date; (ii) does not complete the Pre-Opening Initial Training Program to Franchisor's satisfaction; (iii) does not, during the Pre-Opening Initial Training Program, appear to possess the skills necessary to properly fulfill and discharge the demands and responsibilities required by the Dog Haus System or this Agreement; or (iv) is not acceptable to become a franchisee of Franchisor for any reason whatsoever, in Franchisor's sole and absolute discretion, Franchisor may terminate this Agreement upon five (5) days' written notice to Franchisee and this Agreement shall thereafter be of no further force or effect.
Franchisor shall have the right to retain the Initial Franchise Fee.
Franchisor and Franchisee acknowledge and agree that the actual damages to be suffered by Franchisor in this circumstance are difficult, if not impossible, to determine, and that, under all the facts and circumstances, this calculation of Franchisor's potential damages and retention of the Initial Franchise Fee by Franchisor, are a reasonable, good-faith estimate of those damages.
Source: Item 22 — CONTRACTS (FDD page 87)
What This Means (2025 FDD)
According to Dog Haus's 2025 Franchise Disclosure Document, the initial franchise fee is non-refundable. Specifically, Item 22 of the FDD states that the initial franchise fee is non-refundable, in whole or in part, once paid to Dog Haus. This means that once a prospective franchisee pays the initial franchise fee, they cannot get it back, regardless of whether they proceed with opening the franchise.
However, there is a specific circumstance where Dog Haus may terminate the franchise agreement, but still retain the initial franchise fee. If the Principal Owner fails to complete the Pre-Opening Initial Training Program within five months after the Effective Date; does not complete the training program to Dog Haus's satisfaction; does not appear to possess the necessary skills; or is not acceptable to become a franchisee for any reason, Dog Haus may terminate the agreement and retain the initial franchise fee. Dog Haus and the franchisee acknowledge that determining the actual damages in this situation is difficult, and retaining the initial franchise fee is considered a reasonable estimate of those damages.
This non-refundable policy is a standard practice in the franchise industry, as the franchisor incurs costs from the moment the agreement is signed, such as providing training and support. Prospective Dog Haus franchisees should carefully consider their financial situation and capabilities before paying the initial franchise fee, as it is unlikely to be returned. It is important to fully understand the conditions under which Dog Haus can terminate the agreement and retain the fee, as outlined in the franchise agreement.