Under what circumstances does the Dog Haus Franchisor have the 'Take-Along Right'?
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 franchisor has a 'Take-Along Right' under specific conditions related to a Capital Event. If a Capital Event occurs, Dog Haus has the right to compel the Area Developer to sell the assets of any or all Dog Haus Restaurants, regardless of whether they are under construction, open, or operating. These assets are referred to as the 'Take-Along Assets.'
The value of the Take-Along Assets will be the same value attributable to Dog Haus Restaurants owned and operated by the franchisor or its affiliates at the closing of a Capital Event. To exercise this right, Dog Haus must provide the Area Developer with a written 'Take-Along Notice.' This notice must specify the time and place of the Capital Event's closing, which must be at least thirty days after the date of the Take-Along Notice. The notice must also include the expected price and form of consideration to be paid for the Take-Along Assets at the closing.
This provision means that if Dog Haus undergoes a significant financial event like a merger, acquisition, or major investment, it can force the Area Developer to sell their restaurants at a valuation consistent with the franchisor's own restaurants. This could have significant financial implications for the Area Developer, as they may be required to sell their business at a time or price that is not optimal for them. Prospective franchisees should carefully consider this 'Take-Along Right' and its potential impact on their investment before entering into an agreement with Dog Haus.