What obligations does a Dog Haus franchisee have regarding approved suppliers as described in Item 8, and how are these obligations listed in Item 9?
Dog_Haus Franchise · 2025 FDDAnswer from 2025 FDD Document
ease from us or from suppliers approved by us or according to specifications we issue:
Dog Haus Approved Suppliers.
You may only use suppliers that we have accepted and approved ("Approved Suppliers") because they have demonstrated to us their ability to supply products and services for Franchised Restaurants meeting our specifications as to brand names, models, contents, manner of preparation, ingredients, quality, freshness, compliance with governmental standards and regulations, reliability with respect to delivery and consistency in the quality of their products or services. We will provide you with our Manuals and various supplemental bulletins and notices that will contain the specifications, standards and restrictions on your purchase of products and services. Upon request, we will furnish to you a list of Dog Haus Approved Suppliers that we may update from time to time. You must operate your Franchised Restaurant in strict compliance with the standard procedures, policies, rules and regulations contained in the Manuals. All "Dog Haus Branded Products", "Dog Haus Proprietary Products", "Sub-Branded Products" and "Non-Proprietary Products and Services" designated by us for use and sale at or from the Franchised Restaurant must be purchased from Dog Haus Approved Suppliers. "Dog Haus Branded Products" are products that bear any of the Dog Haus Marks, including products that are prepared, sold and/or manufactured in strict accordance with our, methods, standards and specifications, including pre-packaged food and beverage products, clothing, souvenirs and novelty items. One of our Approved Suppliers, Impossible Foods, Inc. has agreed to permit select Dog Haus franchisees to participate in an optional program under which the franchisees will offer prepared Impossible Foods' products and Impossible Foods' frozen and refrigerated food products from the franchisees' Dog Haus Restaurants through third party Food Delivery Services. DHM provides management services for some current franchisees. DHM derives revenue from providing these services. André Vener, Quasim Riaz, and Hagop Giragossian, who are listed in Item 2, own DHM. During the fiscal year ended December 31, 2024, DHM did not derive any revenue from required franchisee purchases or leases.
Dog Haus Proprietary Products.
You must serve all and only the products we authorize ("Dog Haus Authorized Products"). We may provide you with our proprietary hot dogs, sausages, hamburgers, chicken and plant-based food products, sauces, marinades, branded products and proprietary beverages, food products, packaging and products that are produced or manufactured according to our trade secrets, proprietary recipes, specifications and/or formulas
(collectively, the "Dog Haus Proprietary Products"). You must buy Dog Haus Proprietary Products only from us, our affiliates or our Dog Haus Approved Suppliers. Currently, we, our affiliates and our Dog Haus Approved Suppliers are the only approved suppliers of Dog Haus Proprietary Products. We will not be obligated to reveal our trade secrets or the recipes, specifications and/or formulas of Dog Haus Proprietary Products to you or any third party. You must purchase, use, and maintain in stock a sufficient amount of Dog Haus Authorized Products and Dog Haus Proprietary Products to operate your Franchised Restaurant. During the fiscal year ended December 31, 2024, we did not derive any revenue from required franchisee purchases or leases.
Pyramid Powder is a Dog Haus Approved Supplier and is the only approved supplier for certain furniture and equipment for your Franchised Restaurant. Pyramid Powder will derive a profit from these sales to our franchisees. André Vener, Quasim Riaz, and Hagop Giragossian, our members listed in Item 2, own Pyramid Powder. Pyramid Powder's total revenue in 2024 was $251,003. Pyramid Powder earned all of its revenue from required purchases or leases to our franchisees in 2024. The source of this information is the financial books and records of Pyramid Powder. There are no other suppliers in which any officer owns an interest.
Approximately 70 - 75% of your start-up expenses and 70 - 80% of your ongoing expenses, will be for purchases from Dog Haus Approved Suppliers or purchases according to our specifications.
What This Means (2025 FDD)
According to Dog Haus's 2025 Franchise Disclosure Document, franchisees are generally required to purchase specific products and services from approved suppliers. These suppliers are vetted by Dog Haus to ensure they meet the brand's standards for quality, consistency, and compliance. Franchisees must buy "Dog Haus Branded Products", "Dog Haus Proprietary Products", "Sub-Branded Products" and "Non-Proprietary Products and Services" from these Approved Suppliers. These products include items bearing Dog Haus trademarks, specialized food items, and other designated goods necessary for restaurant operation.
If a franchisee wishes to use a supplier not already approved, they must seek approval from Dog Haus. This process involves providing detailed information about the proposed supplier, including their name, address, and the specific items or services they offer. Dog Haus may request samples of the supplier's products or services to ensure they meet the required specifications. The approval may be conditional, requiring the supplier to maintain confidentiality, comply with Dog Haus's standards, and sell branded materials only to franchisees. Dog Haus also reserves the right to inspect the supplier's facilities and conduct product testing, with the franchisee bearing the associated costs. A deposit of up to $1,000 may be required before the inspection.
Dog Haus retains the authority to revoke supplier approval if the supplier fails to meet ongoing requirements. This ensures that all products and services used in the franchise system maintain the brand's standards. Franchisees are notified in writing if a supplier's approval is withdrawn. The FDD excerpt does not specify where these obligations are listed in Item 9. A prospective franchisee should review Item 9 of the FDD to understand how these supplier obligations are financially detailed, including any potential rebates or other financial arrangements related to approved suppliers.