What is the 'Take-Along Right' in the Dog Haus Area Development Agreement?
Dog_Haus Franchise · 2025 FDDAnswer from 2025 FDD Document
- 9.1.2 Upon the occurrence of a Capital Event, Franchisor shall have the right (the "Take-Along Right") to compel Area Developer to sell and, in such event, Area Developer shall sell the assets of any or all of the Dog Haus Restaurants, regardless of whether such Dog Haus Restaurants are under construction or are Open and operating (collectively the "Take-Along Assets") at the same value attributable to Dog Haus Restaurants owned and operated by Franchisor or its Affiliates at the closing of a Capital Event.
Franchisor shall exercise this Take-Along Right to compel the sale of the Take-Along Assets by Area Developer by providing Area Developer with written notice (the "Take-Along Notice") setting forth the time and place of the closing of the Capital Event, which time and place shall not be less than thirty (30) days after the date of the Take-Along Notice, and the expected price and form of consideration to be paid for the Take-Along Assets at the closing.
Source: Item 23 — RECEIPTS (FDD pages 87–328)
What This Means (2025 FDD)
According to Dog Haus's 2025 Franchise Disclosure Document, the 'Take-Along Right' refers to the franchisor's ability to compel an Area Developer to sell their Dog Haus restaurants under specific circumstances. Specifically, this right is triggered by a 'Capital Event,' which is not defined in the provided excerpts.
If a Capital Event occurs, Dog Haus has the right to force the Area Developer to sell the assets of any or all of their Dog Haus restaurants, regardless of whether they are under construction or already open and operating. The sale price for these restaurants will be the same value attributed to Dog Haus restaurants owned and operated by the franchisor or its affiliates during the Capital Event.
Dog Haus must provide written notice to the Area Developer, called a 'Take-Along Notice,' at least thirty days before the closing of the Capital Event. This notice will include the time and place of the closing, as well as the expected price and form of consideration for the assets. This clause ensures that in the event of a major financial event impacting the franchisor, they can consolidate assets by acquiring the Area Developer's restaurants at a valuation consistent with the franchisor's own holdings. A prospective franchisee should seek clarification from Dog Haus regarding what constitutes a 'Capital Event' to fully understand the conditions under which this clause may be invoked.