What rights does the Franchisor reserve outside the Development Area for Dog Haus?
Dog_Haus Franchise · 2025 FDDAnswer from 2025 FDD Document
Except as expressly provided in Section 2.2, Franchisor expressly reserves all other rights, including the exclusive, unrestricted right, in its discretion, directly and indirectly, through its
employees, Affiliates, representatives, licensees, assigns, agents and others, to (i) develop, own and operate, and to grant franchises to third parties to develop, open and operate, Dog Haus Restaurants outside the Development Area, regardless of their proximity to the Development Area; (ii) develop, open and operate, and to grant franchises to third parties to develop, open and operate any other business, including a beverage and snack or food business, other than a Competitive Business, under marks and systems different from the Dog Haus Marks and the Dog Haus System within and outside the Development Area; (iii) sell or distribute, at retail or wholesale, directly or indirectly, or license others to sell or distribute, Dog Haus Branded Products and Dog Haus Proprietary Products within and outside the Development Area, through the Internet, mail order catalogs, direct mail advertising, catering and through other distribution methods; (iv) deliver and cater and/or to license to other Dog Haus Restaurants or third parties to deliver and cater at any location within or outside of the Development Area without compensation to Area Developer, and to establish a delivery and Catering Services policy in the future which may restrict the delivery and Catering Services jurisdiction of Franchisor or of any Dog Haus Area Developers; (v) market on the Internet and use the Dog Haus Marks on the Internet, including all use of web sites, domain names, URLs, directory addresses, email addresses, metatags, linking, advertising, co-branding and other arrangements, and in all other forms of electronic media; (vi) open or operate and to franchise or license others to open or operate Dog Haus Restaurants at any Non-Traditional Venue within and outside of the Development Area regardless of their proximity to any Dog Haus Restaurants developed or under development by Area Developer; (vii) acquire the assets or ownership interests of one or more businesses providing products and services similar to those provided at Dog Haus Restaurants and to franchise, license or create similar arrangements with respect to these businesses once acquired, wherever these businesses (or the franchisees or licensees of these businesses) are located or operating; (viii) be acquired (whether through acquisition of assets, ownership interests or otherwise, regardless of the form of transaction), by any business providing products and services similar to those provided at Dog Haus Restaurants, or by another business, even if such business operates, franchises and/or licenses Competitive Businesses; and (ix) engage in all other activities that this Agreement does not expressly prohibit.
Source: Item 23 — RECEIPTS (FDD pages 87–328)
What This Means (2025 FDD)
According to Dog Haus's 2025 Franchise Disclosure Document, the franchisor retains significant rights outside the Development Area. Dog Haus reserves the right to develop, own, and operate Dog Haus restaurants or grant franchises to others outside the Development Area, irrespective of their proximity to the franchisee's Development Area. This means that Dog Haus can establish competing locations near a franchisee's territory without restriction.
Dog Haus also reserves the right to develop, operate, or franchise any other business, including beverage, snack, or food businesses (excluding Competitive Businesses), under different marks and systems both within and outside the Development Area. This allows Dog Haus to diversify its business ventures without being limited by the franchisee's exclusive rights, as long as these ventures are not direct competitors under the Dog Haus brand. Furthermore, Dog Haus can sell or distribute Dog Haus-branded products through various channels like the Internet, mail order, and catering, both within and outside the Development Area.
Additionally, Dog Haus maintains the right to market on the Internet using Dog Haus Marks, including websites and electronic media. They can also open or franchise Dog Haus restaurants at Non-Traditional Venues both within and outside the Development Area, regardless of proximity to existing franchisee locations. Dog Haus can acquire businesses providing similar products/services and franchise or license them, irrespective of location. These stipulations ensure Dog Haus retains control over brand development, alternative distribution channels, and expansion into new markets, which could impact a franchisee's market share and revenue potential.
Finally, Dog Haus can be acquired by another business, even one operating Competitive Businesses. This clause indicates that the future direction of Dog Haus could change significantly through acquisition, potentially introducing competition or altering the brand's strategy. These reserved rights collectively provide Dog Haus with extensive flexibility in its business operations and strategic decisions, which a prospective franchisee should carefully consider.