After termination or expiration of the Dog Haus Area Development Agreement, is the Franchisor restricted from developing, opening, or franchising Dog Haus restaurants within the former Development Area?
Dog_Haus Franchise · 2025 FDDAnswer from 2025 FDD Document
To protect the Dog Haus System, the Dog Haus Marks, the Dog Haus Trade Secrets and the goodwill associated with the same, upon termination or expiration of this Agreement: (i) Area Developer shall have no further right to develop any Dog Haus Restaurants; (ii) Area Developer shall have no further rights or obligations under this Agreement or the Dog Haus Franchise Agreements that were terminated; (iii) Area Developer shall have the right to continue to own and operate all Dog Haus Restaurants Opened by Area Developer prior to the termination date under Franchise Agreements with Franchisor that remain in full force and effect on the termination date; and (iv) Franchisor may thereafter develop, open and operate, and grant franchises to third parties to develop, open and operate Dog Haus Restaurants at any location within or outside of the Development Area, without restriction.
Source: Item 23 — RECEIPTS (FDD pages 87–328)
What This Means (2025 FDD)
According to Dog Haus's 2025 Franchise Disclosure Document, after the termination or expiration of the Area Development Agreement, Dog Haus is not restricted from developing, opening, or franchising Dog Haus restaurants within the former Development Area. Specifically, upon termination or expiration, the Area Developer loses the right to develop further Dog Haus restaurants. Dog Haus retains the right to develop, open, and operate restaurants, and grant franchises to third parties, without any location restrictions, whether inside or outside the Development Area. This clause protects the Dog Haus system, trademarks, trade secrets, and associated goodwill.
This provision means that a former Area Developer will not have any territorial protections after the agreement ends. Dog Haus can directly compete or allow others to compete in the same area where the developer previously operated. This is a significant consideration for potential Area Developers, as the value of their developed market could be impacted after the agreement's term.
However, the Area Developer retains the right to continue owning and operating any Dog Haus restaurants opened prior to the termination date, provided those restaurants are under franchise agreements that remain in full force and effect. This allows the Area Developer to continue deriving revenue from existing locations, even after the Area Development Agreement concludes. A prospective franchisee should carefully consider the implications of this clause, especially concerning the potential for increased competition in their developed area after the agreement's expiration or termination.