What is the 'Take-Along Right' that Dog Haus has upon the occurrence of a Capital Event?
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 Dog Haus's ability to compel an Area Developer to sell the assets of any or all Dog Haus Restaurants they own if a Capital Event occurs. This applies whether the restaurants are under construction, open, or operating.
A 'Capital Event' triggers this right, allowing Dog Haus to essentially force the Area Developer to sell their restaurants' assets. The price for these assets will be the same value attributed to Dog Haus Restaurants owned and operated by Dog Haus or its affiliates at the closing of the Capital Event.
Dog Haus must provide the Area Developer with a written 'Take-Along Notice' at least thirty days before the closing of the Capital Event. This notice will specify the time and place of the closing, as well as the expected price and form of consideration for the assets. This means that while Dog Haus can compel the sale, they must provide reasonable notice and a valuation consistent with their own restaurants.
This clause is significant for prospective Area Developers as it demonstrates that Dog Haus retains considerable control over the assets developed within an area. While the Area Developer invests in and develops the restaurants, Dog Haus can force a sale under certain conditions, potentially impacting the Area Developer's long-term investment strategy.