Is Dog Haus obligated to extend credit to the franchisee if a payment is late?
Dog_Haus Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisor, or its Affiliates, in its sole and absolute discretion, may establish the credit terms, if any, upon which it will accept Franchisee's orders, and may require Franchisee to pay for orders on a cash-in-advance or cash-ondelivery basis.
On the expiration or termination of this Agreement, or in the event of any Default by Franchisee under this Agreement, Franchisor or its Affiliates shall not be obliged to fill or ship any orders then pending or, in the case of termination or non-renewal, made any time thereafter by Franchisee and may, among other things, only deliver the quantities reasonably necessary to supply Franchisee's needs prior to the expiration or termination of this Agreement.
Source: Item 22 — CONTRACTS (FDD page 87)
What This Means (2025 FDD)
According to Dog Haus's 2025 Franchise Disclosure Document, Dog Haus or its affiliates have the discretion to establish credit terms, if any, for franchisees. They can require franchisees to pay for orders in advance or upon delivery. This means Dog Haus is not obligated to extend credit to franchisees and can demand immediate payment for orders.
Dog Haus retains the right to determine the credit terms, if any, it will offer to a franchisee. This allows Dog Haus to manage its risk by requiring cash payments, especially if a franchisee has a history of late payments or financial instability. This flexibility protects Dog Haus's financial interests and ensures timely payments for products and services.
Furthermore, upon the expiration or termination of the Franchise Agreement, or if the franchisee defaults, Dog Haus is not obligated to fulfill any pending orders. They may limit deliveries to only what is reasonably necessary to supply the franchisee's needs before the agreement ends. This provision protects Dog Haus from potential losses if a franchisee's operation ceases or if the agreement is terminated due to a breach by the franchisee.