What is the relationship between the Development Agreement and the Franchise Agreement for Dog Haus regarding dispute resolution?
Dog_Haus Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section In Area Development Agreement (Exhibit B) | Summary |
|---|---|---|
| n. Franchisor's right of first | Section 9.3 | We may match any offer to purchase your business. |
| refusal to acquire Area | ||
| Developer's business | ||
| o. Franchisor's option to purchase Area Developer's business | 9.1 | We may sell our assets, the Dog Haus Marks or the Dog Haus System, may sell securities in a public offering or in a private placement, may merge, acquire other corporations, or be acquired by another corporation, and may undertake a refinancing, recapitalization, leveraged buy-out, or other economic or financial restructuring (each a "Capital Event") all without your consent or approval by you. Upon the occurrence of a Capital Event, we have the right to compel you to sell to us the assets of all your Dog Haus Restaurants, whether or not they are open or under construction. |
| p. Death or disability of Area Developer | Section 9.5 | Your spouse, heirs or personal representative has 180 days to purchase your interest or complete an assignment of your interest to a qualified, approved third party, subject to the transfer provisions. |
| q. Non-competition covenants during the term of the franchise | Section 13.2 | You are prohibited from: (i) diverting any present or prospective Dog Haus customer to any competitor, or performing any other act injurious or prejudicial to the goodwill associated with the Dog Haus Marks and the Dog Haus System; or (ii) owning or having any interest in a "Competitive Business" with Dog Haus Restaurants. A "Competitive Business" is defined as any restaurant business that prepares, offers and sells gourmet hot dogs, sausages, hamburgers, chicken, plant-based food products or any combination of these products as primary menu items and any business that looks like, copies, imitates, or operates with similar trade dress or décor to Dog Haus Restaurants. (subject to state law) |
| r. Non-competition covenants after the franchise is terminated or expires | Section 13.3 | For 2 years following the expiration or termination of your Area Development Agreement, you cannot own or have any interest in a competitive business within 2 miles of any location designated as a "Franchised Location" in a Franchise Agreement between you and us, or at any location within a 2 mile radius of any Dog Haus Restaurant or a Franchised Location. (subject to state law) |
| s. Modification of the Area Development Agreement | Section 18.5 | The Area Development Agreement can be modified or amended only by written agreement of all of the parties. |
| t. Integration/merger clause | Section 18.5 | Only the terms of the Area Development Agreement and its exhibits are binding (subject to applicable state law). No other representations or promises will be binding. Any representations or promises outside of the Disclosure Document and Area Development Agreement may not be enforceable. |
| u. Dispute resolution by arbitration or mediation | Sections 15.1 and 15.2 | You agree to attempt any dispute first by mediation, which will occur in Los Angeles, California. Mediation must be completed within 45 days following the date either party first gives notice of mediation, unless otherwise agreed in writing. The fees and |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION THE FRANCHISE RELATIONSHIP (FDD pages 63–72)
What This Means (2025 FDD)
According to Dog Haus's 2025 Franchise Disclosure Document, both the Area Development Agreement and the Franchise Agreement address dispute resolution. Specifically, the Area Development Agreement states that disputes should first be attempted through mediation in Los Angeles, California. This mediation must be completed within 45 days of notice, unless otherwise agreed upon in writing by both parties. The document does not specify how dispute resolution is handled in the Franchise Agreement.
For a prospective Dog Haus franchisee, this means that if a dispute arises under the Area Development Agreement, they are obligated to participate in mediation in Los Angeles within a relatively short timeframe. This could involve travel costs and legal representation expenses. The outcome of the mediation is not guaranteed, but it is a required first step before other legal actions can be pursued.
Because the excerpt does not describe the dispute resolution process for the Franchise Agreement, a prospective franchisee should ask Dog Haus about the specific procedures outlined in that agreement. Understanding the differences, if any, between dispute resolution under the Area Development Agreement and the Franchise Agreement is crucial for managing potential conflicts and legal obligations.