Is Dog Haus required to grant an exclusive territory to a franchisee?
Dog_Haus Franchise · 2025 FDDAnswer from 2025 FDD Document
a portion of the direct costs to provide the Annual Franchise Conference. You must pay the Franchise Conference Fee upon demand at 30 days before the date of the Annual Franchise Conference, whether or not you attend the Annual Franchise Conference. (Franchise Agreement, Section 7.29).
ITEM 12 TERRITORY
Franchise Agreement
You will be permitted to operate your Franchised Restaurant at a specific location that we accept, as described in your Franchise Agreement. You will not receive an exclusive territory. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control. Our acceptance of your Franchised Location will be based upon a variety of factors which may include the viability of the then-current location and demographics including, number of households, household income, vehicular traffic, and number of Franchised Restaurants near the proposed new location. You may face competition from other Franchised Restaurants that we or our affiliate franchise or own and that operate at traditional sites.
You will be granted a protected territory ("Protected Area") of a 1/2 - 5 mile radius from your Franchised Restaurant as described in the Franchise Agreement. Your Protected Area will be designated when you have identified a site for your Franchised Restaurant. Factors that we consider in determining the size of your Protected Area include the demographics, population size, age and income levels, neighboring and adjacent retail tenants, road visibility, traffic patterns, geographical barriers and proximity of other Dog Haus Restaurants or competitors serving the same market area. Provided you are not in default under your Franchise Agreement, we will not own, operate, sell or issue a Franchised Restaurant franchise to another franchisee in your Protected Area. There are no other radius restrictions or minimum population requirements that limit where we can franchise or operate another Franchised Restaurant. You may not relocate your Franchised Restaurant to any other location without our prior written consent.
If you are a Remote Kitchen franchisee, with our prior written consent, we may grant you the non-exclusive right to fulfill orders from Food Delivery Service customers in geographic areas immediately adjacent to your Protected Area who are not located within the protected area of another Dog Haus Restaurant.
Source: Item 12 — TERRITORY (FDD pages 53–57)
What This Means (2025 FDD)
According to Dog Haus's 2025 Franchise Disclosure Document, franchisees do not receive an exclusive territory under the standard Franchise Agreement. Instead, Dog Haus grants a protected territory, referred to as a "Protected Area," which typically spans a radius of 1/2 to 5 miles from the franchisee's restaurant. The size of this protected area is determined by factors such as demographics, population, income levels, nearby retail, traffic patterns, and the proximity of other Dog Haus locations or competitors. As long as the franchisee is not in default of their agreement, Dog Haus will not operate or franchise another location within this Protected Area. However, franchisees may still face competition from other franchisees, company-owned outlets, or other distribution channels controlled by Dog Haus.
For franchisees entering into an Area Development Agreement with Dog Haus, the agreement does not grant an exclusive territory. However, during the term of the Area Development Agreement, Dog Haus commits not to operate or grant a franchise to others within the defined Development Area. This Development Area can encompass one or more cities, counties, states, or another defined region. Once the Area Development Agreement expires, Dog Haus has the right to operate or franchise other locations within the former Development Area, subject to the protected territories granted in the individual Franchise Agreements.
Dog Haus retains significant rights outside of the Protected Area, including the right to develop, own, and operate franchises, sell Dog Haus branded products through various channels, and market on the internet. They can also establish delivery and catering policies that may affect a franchisee's service area. These rights allow Dog Haus to pursue various business opportunities without compensating the franchisee, highlighting the importance of understanding the scope and limitations of the Protected Area.