What is Dog Haus's policy on withholding consent for a franchisee to assign their agreement?
Dog_Haus Franchise · 2025 FDDAnswer from 2025 FDD Document
relied upon by Franchisor and any prospective purchaser, assignee or lender of Franchisor.
- 14.2 Assignment by Franchisee. Franchisee acknowledges and agrees that the rights granted to Franchisee under this Agreement are personal and are granted in reliance upon, among other considerations, the individual or collective character, skill, aptitude, attitude, experience, business ability and financial condition and capacity of Franchisee and, if Franchisee is an Entity, that of the Owners. Accordingly, to protect the Dog Haus System, the Dog Haus Marks, the Dog Haus Trade Secrets and the goodwill associated with the same, Franchisee shall not offer, sell, or negotiate the sale of its rights under this Agreement to any third party, either in Franchisee's own name or in the name and/or on behalf of Franchisor, except as otherwise provided in this Agreement. Franchisee acknowledges and agrees that Franchisee has no right, by operation of law or otherwise, to sell, assign, transfer, pledge, donate, encumber or otherwise deal with, directly or indirectly, (i) any interest in this Agreement; or (ii) the right to use the Dog Haus System or the Dog Haus Marks (an "Assignment") without Franchisor's prior written consent. Franchisor shall not unreasonably withhold its consent to an Assignment if, in Franchisor's judgment, Franchisee satisfies the conditions to the Assignment identified in this Agreement.
Source: Item 22 — CONTRACTS (FDD page 87)
What This Means (2025 FDD)
According to Dog Haus's 2025 Franchise Disclosure Document, franchisees are generally restricted from assigning their franchise agreement without the franchisor's prior written consent. Dog Haus will not unreasonably withhold consent to an assignment if the franchisee meets the conditions outlined in the agreement. However, Dog Haus retains the discretion to withhold consent under certain circumstances.
Specifically, Dog Haus may withhold consent if the franchisee attempts to offer or transfer their rights at a public or private auction. Similarly, franchisees are prohibited from pledging, encumbering, or granting a security interest in the franchise agreement to a third party without prior written consent from Dog Haus, which Dog Haus can withhold at its discretion. If such a prohibition is deemed ineffective under applicable law, the franchisee must provide Dog Haus with at least ten days' prior written notice, including details of the secured party and the terms of the security interest.
This policy ensures that Dog Haus maintains control over who operates its franchises and protects the brand's integrity. A prospective franchisee should carefully review the conditions for assignment in the franchise agreement to understand their rights and obligations regarding the sale or transfer of their Dog Haus franchise. It is important to note that the assignee must execute Dog Haus's current form of Franchise Agreement for each Franchised Restaurant sold to the assignee.